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PHILIPPINE
STOCK
EXCHANGE
MAJOR STOCK EXCHANGES ECONOMY STOCK EXCHANGE
US & EUROPE NYSE
US & EUROPE (NORTH) NASDAQ
JAPAN TOKYO STOCK EXCHANGE
UNITED KINGDOM LONDON STOCK EXCHANGE
EUROPE EURONEXT
CHINA SHANGHAI STOCK EXCHANGE
HONG KONG HONGKONG STOCK EXCHANGE
CANADA TORONTO STOCK EXCHANGE
BRAZIL BM&F BOVESPA
ECONOMY STOCK EXCHANGE
AUSTRALIA AUSTRALIAN SECURITIES EXCHANGE
GERMANY DEUTSCHE BORSE
SWITZERLAND SIX SWISS EXCHANGE
CHINA SHENZHEN STOCK EXCHANGE
SPAIN BME SPANISH EXCHANGES
INDIA BOMBAY STOCK EXCHANGE
SOUTH KOREA KOREA EXCHANGE
PHILIPPINES PHILIPPINE STOCK EXCHNGE
RUSSIA MICEX – RTS
BACKGROUND
• The Philippine Stock Exchange, Inc. ("PSE" or the "Exchange") is a private non-profit and non-stock organization created to provide and ensures a fair, efficient, transparent and orderly market for the purchase and sale of securities such as stocks, warrants, bonds, options and others. (Knowing the Philippine Stock Exchange, 1999)
BACKGROUND • At present, PSE maintains two trading floors -- one in Makati City
and another in its head office in Pasig City. Even with two trading floors, PSE maintains a "one-price, one-market" exchange through the MakTrade System.
ROLES
• brings together companies which aim to raise capital through the issue of new securities
• the PSE plays a vital role in the financing of productive enterprises that use the funds for growth and expansion of new jobs. It is therefore essential to the growth of the Philippine economy.
ROLES
• facilitates the selling and buying of the issued stocks and warrants
• It provides a suitable market for the trading of securities to individuals and organizations seeking to invest their saving or excess funds through the purchase of securities.
• the PSE has committed itself to:
(a) protecting the interest of the investing public; and
(b) developing and maintaining an efficient, fair, orderly and transparent market.
SIGNIFICANCE
• It provides and ensures a fair, efficient, transparent and orderly market for the buying and selling of securities for investors and stakeholders.
• It address public demand for speedy access to information on the securities market
• It offers transparency of listed companies and ensures full, fair, timely and accurate disclosure of material information from all listed companies.
SIGNIFICANCE
• It provides comprehensive market data, stock quotations, dividend declarations, trading activities, and other pertinent information on the PSE, trading participants, listed companies and other institutions.
• It is a critical factor in improving settlement efficiency, increasing market liquidity and development of derivative instruments.
(Knowing the Philippine Stock Exchange, 1999)
TRADING HOURS
• Playing of the National Anthem 8:45a.m. Pre-open Period 9:00a.m. - 9:30a.m. Calculation of Open Price/Market Open 9:30a.m. Regular Trading Period 9:30a.m.-12:00noon
1:30-3:30 pm
• A ten (10) minute extension from closing time shall be allowed to execute orders at closing prices.
Why do people start businesses?
PROFIT
When you make money in business, it is called a
profit.
Mathematically: Profit = Revenue – Cost
For example: If you buy an iphone for 10000 and
sell it for 12000, you made a profit of …
HOW DO YOU RAISE MONEY TO START A
NEW BUSINESS?
One way to raise money is to borrow money from a
bank. This money must be paid back.
You can also sell ownership
in the company. This
means you have other
people give you money
and they have a share in
the profits (and losses) of
the company. These
ownership shares are
called shares of stocks.
STOCKS
If you own shares of a
company, you can
sell them to other
people in the stock
market.
THE STOCK MARKET
The Philippine Stock
Exchange (PSE) is one of
these markets.
• The kind of money that the average investor should
put in the stock market is money that he or she
won’t be needing today, tomorrow, next year,or even
5 to 10 years from now.This is because you can
never exactly predict what the value of your
investment will be in the coming years. So even
though the average annual return on the stock
market (from 1989 to 2009) was 14% per year,
future returns are never guaranteed.
HOW MUCH MONEY DO I PUT IN THE STOCK
MARKET?
• The biggest problem that can arise with
investing is when your personal situation
forces you to suddenly sell your investments
for cash when the market is down. In order to
prevent the problem above, there are three
ways to protect your investments from a
sudden need of cash.
THE BIGGEST PROBLEM IN INVESTING
• 1. Protect yourself with insurance. This is to make
sure that when an accident happens (to you, your
loved ones, your car, home, or business) it will be
the insurance company that will be obligated to
pay for it. At the same time, you won’t need to
cash out on your investments.
• 2. Shield yourself with an emergency fund. An
emergency fund is a sum of money set aside just
for emergencies. The general minimum of this
amount is 6 months of your living expenses. This
is for the unexpected things in your life which
can’t or won’t be covered by insurance. So if you
• suddenly need money because you lost your
job, you can live off your emergency fund
untilyoufinda newone.
• 3. Only put in money you won’t be using for the
next 5 years. In order to be able to do this, you
should have a good grasp of the amount of
money you’ll be using.Don’t forget to factor in
the once a year expenses like birthdays and
holidays. When the 13th month pay isn’t
enough to cover for your Christmas expenses,
it would be very tempting to cash in on your
investments.
HOW MUCH TIME DO I NEED TO USE IN STOCK
MARKET?
©2011 CENGAGE LEARNING. ALL RIGHTS RESERVED. MAY NOT BE SCANNE D, COPIED OR DUPLICATED, OR POSTED TO A PUBLICLY ACCESSIBLE WEBS ITE, IN WHOLE OR IN PART.
STOCK MARKET BASICS
RIGHTS OF SHAREHOLDERS
24
• Shareholders (stockholders) have ownership
interest in the company proportional to shares
owned.
• Rights include:
1.rights to be ‘residual claimants’
2.voting rights influence management
STOCK PRICES
When a company is doing well, more people want
to buy the stock and its price in the market rises.
When a company is
not doing well, more
people want to sell
the stock and its price
falls.
DIVIDENDS
When a company makes a profit, they typically pay
the owners of stock a dividend.
WHAT CAUSES STOCK PRICES TO CHANGE?
• Supply and Demand
• Earnings and Expectations
• Sentiments and Attitudes
• Economic Indicators
• Follow the Leader (volume)
• Anything
©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
HOW THE MARKET SETS PRICES
46
• The price is set by the buyer willing to pay the
highest price
• The market price will be set by the
buyer who can take best advantage of the asset
• Superior information about an asset can
increase its value by reducing its risk
15300+45.14=15345.14
15600+124.02=15475.98
WHICH STOCKS ARE YOU
GOING TO BUY?
WHAT IS YOUR STRATEGIES?
ies
GENERAL MARKET ADVICE:
1. Never chase a stock.
2. Buy when markets are in the grip of panic.
3. Only buy fundamentally strong stocks, which are
undervalued.
4. Buy stocks grown in top line and bottom line over
the past years.
5. Invest in companies with proven management.
6. Avoid loss-making companies.
7. PE Ratio and Growth in earnings per share are
the key.
8. Look for the dividend paying record.
9. Invest in stocks for sure returns.
10. Stocks have been the high yielding asset class over the past.
11. Stocks are an asset class.
12. The basic property of any asset class is to grow.
13. Buy when everyone is selling and sell when everyone buys.
14. Invest a fixed amount each month.
WHAT YOU MUST DO
Get rid of the junk
Diversify
Believe in your investment
Stick to your strategy
WHAT YOU MUST NOT DO
Don't panic
Don't make huge investments
Don't chase performance
Don't ignore expenses
PREPARED BY:
•ODIELON O. GAMBOA
“Take a RISK, if you win, you will be
happy, if you loose, you will learn”