since i am an idiot, can anyone please tell me what the PSE is all about?

[computergeek]

i just want to know some basics regarding the Philippine Stock Exchange, the currency trading (i mean why does it vary all the time and what are the factors that would make it stronger or weaker versus the dollar or any other foreign currencies)..
what is phisix coz i am a total ignorant of these things.. at ano ba yung nasdaq etc?

pwede rin bang itanong kung ano yung graph na nakikita ko whenever i read broadsheets na minsan pataas at minsan pababa? it refers to the stock market but i dont know what it is all about..
lahat ba ng company na registered sa phippines can be seen in the list of the pse? or is it (PSE) exclusive for bigger companies?

im very sorry to bother you people but i am an engineering graduate and unfortunately, wala talaga akong alam when it comes to business.
I'm planning to take up my masteral this coming school year but since i am very much fond of the trading thing and much about business matters, is it ok to take up MBA or is it better to take up masteral in economics?

parang awa nyo na, paki explain naman sa akin kahit konti lang, yung pang lay man since i am a complete imbecile when it comes to these matters.

i reallty appreciate even for just spending your time in reading my post...
thank you in advance..

[computergeek]

and pahabol pala..
meron bang concise na libro na pwede kong bilhin to know tha basics of economics?

pasensya na sa tanong ko ha, coz i read some posts reagrding the thing but i can hardly understand it..
sensya na talaga..

[KuyaDanny]

Hi, computergeek. I suggest you visit this thread:

How to Invest? (http://www.pinoyexchange.com/forums/showthread.php3?threadid=63221)

You will get to meet some of our stock market heavyweights such as richyuppie, Spyfrat, and Hulk who will be more than willing to give you the basic training. Right, guys?

A bit of a warning, though. They will all attempt to deny they are heavyweights, so maybe we should call them overweight instead. :lol:

Good luck.

[Spyfrat]

Kuya Danny ang cute mo talaga. :glee:
may kasamahan pala akong enhinyero ** :)

try visiting www.pse.org.ph
for some stuffs about what is a stock market.

[sam7268]

computergeek, read economics by samuelson. that's the best book for the basics. the "phisix" stands for the Philippine Stock Exchange Index.

the charts that you see are the prices of a particular stock, or the levels of the index, and can be shown on a daily, weekly, monthly, etc. basis.

no, not all registered companies in the philippines can be seen in the pse list, only "publicly-listed" companies. when a company goes public, it means that it issues shares to the public (us common people), for their money. this is normally done to raise capital. so when you buy shares of a company, it means that you partly own it.

MBA or masteral in economics? hmm ... the only way you can really learn about trading is to get right into it. read books on it, too. i don't think you need a master's degree for that. i know a lot of mba people who still don't know anything about how the stock market works.

yup, do check out pse.org.ph. kung medyo malabo pa rin, post ka uli. spyfrat will reply. ;)

[computergeek]

Originally posted by sam7268
computergeek, read economics by samuelson. that's the best book for the basics. the "phisix" stands for the Philippine Stock Exchange Index.

the charts that you see are the prices of a particular stock, or the levels of the index, and can be shown on a daily, weekly, monthly, etc. basis.

no, not all registered companies in the philippines can be seen in the pse list, only "publicly-listed" companies. when a company goes public, it means that it issues shares to the public (us common people), for their money. this is normally done to raise capital. so when you buy shares of a company, it means that you partly own it.

MBA or masteral in economics? hmm ... the only way you can really learn about trading is to get right into it. read books on it, too. i don't think you need a master's degree for that. i know a lot of mba people who still don't know anything about how the stock market works.

yup, do check out pse.org.ph. kung medyo malabo pa rin, post ka uli. spyfrat will reply. ;)


thanks..
i'll try to read it muna and pag di ko naintindihan, can i just pex you?

[Remington870]

computergeek,

A stock exchange is where people buy and sell shares of stock in listed companies. If you have gone to a public market with your mom, you know they sell meat, fruit and vegetables there. The stock exchange is where you go if you want to buy shares of stock in listed companies.

In the public market, depending on supply and demand, (there are many factors that can affect supply and demand such as: seasonality, the moon's cycle and consumption behavior patterns). For example, mangoes are more expensive off-season, fish are more expensive when the moon is full or during Holy Week. Prices vary from stall to stall in the public market. Taking this one step further, if you can find a cheap seller, buy the product and sell it to a willing buyer for a higher price, then you make a profit.

The stock market works the same way. You try to buy when the price is low and sell when the price moves up. Only this time, the commodity you are buying and selling (trading) are shares of stock. The price graph you see on TV or in the newspaper is the historical record of the price movement of a particular stock or commodity. Every item has a historical price record. Currencies, gold, crude oil, interest rates, even the length of women's skirts as dictated by fashion can be recorded and tracked if you wanted to!!!

:D

[sam7268]

Originally posted by computergeek



thanks..
i'll try to read it muna and pag di ko naintindihan, can i just pex you?

sure you can ...;)

[Remington870]

computergeek,

Regarding your question on taking up either MBA or a masteral in economics, the two are very different animals. MBA has more to do with preparing you for a supervisory and managerial position in a business organization. It attempts to expose you to real-life work situations compared to university programs where you normally work alone. MBA is solving real-life, adopted to the classroom cases by working as part of a group. They assign you to a group and each of you works on part of the solution and the case is presented and defended in front of the class and the professor. Each group makes their own presentation and the other groups make their comment and critique. At the end of the program, you will be able to make better decisions as a mid-level supervisor or manager in real-life situations that you encounter in actual work because you will be able to evaluate and realize the advantages/disadvantages and good and bad consequences of every decision you eventually make.

Masteral in economics is a deeper, in-depth study of economics from a micro (company or industry) and macro (national) level. At the end of the program, you should be able to understand the statistics that the NEDA reports and the impact of certain inputs or developments to the micro (industry) and macro (national) level. You will realize the potential impact of El Nino on the agricultural sector and its subsequent impact on private consumption. You will learn what the government can do in order to offset the impact of El Nino (investments in irrigation facilities and front-end spending in the first half of the year) and its limitations (good for rice farmers, no impact for coconut farmers).

Stuff like that.

[richyuppie]

computergeek, being ignorant about the stock market does not mean that you’re an idiot. All of us started that way, and you won’t learn everything in a month or two. Anyway, here are some basic terms that you should know about the stock market:

· Stocks – are shares of ownership or corporate capital of a corporation

· Share– is one of the equal parts into which the capital of the corporation is divided

· Initial Public Offering (IPO) – refers to a company that puts up their stock for sale

· Stock Market – a network of institutions engaged in buying and selling of shares of stocks of corporations. It consists of a stock exchange, a number of investment houses, brokerage firms, a crowd of brokers and dealers, and thousands of investors.

· Stock Exchange – it is the place where the stocks are bought and sold in an orderly manner. It is on the trading floor of the exchange where brokers representing investors meet daily at the given time to trade stocks.

· Philippine Stock Exchange (PSE) – formed in 1993 by the merger of the Makati Stock Exchange and the Manila Stock Exchange.

· Index – a market indicator that averages stocks to determine how the market is doing in a specific sector component

· Philippine Stock Exchange Composite Index (PHISIX) – a market indicator that averages 30 stocks in 3 different categories to determine how the market as a whole is doing

The capital of a corporation is composed of outstanding shares. Each share represents
ownership of a corporation. If XYZ Company wants to raise money, they have an option to sell some of its outstanding shares to the general public though an Initial Public Offering (IPO). The Philippine Stock Exchange (PSE) can do the IPO for XYZ.

The PSE is composed of more than a hundred brokerage houses, investment houses, or security firms. These brokerage houses will be the one to sell the shares in behalf of XYZ. Investors who want to buy shares of XYZ should coordinate with these brokerage houses before they can buy shares of XYZ. After the IPO, those who bought XYZ can now sell it at the trading floor through their brokers during trading hours.

There are hundreds of companies listed in the PSE. Each company falls in a specific sector component or category (i.e. Banks, Holding Firms, Property, etc.). An Index is used to determine how a specific sector component performed during the day. So if the Property Index went up, it means that the stocks listed under property increased its share price as a whole. The PHISIX is the tool used to determine how the market performed as a whole. If you want to know how the Philippine Market is doing, look at the PHISIX.

Nope, not all the companies in the Philippines are listed in the PSE, and the PSE is not exclusive for big companies. There is a sector called SME (Small and Medium Enterprises). Right now, there’s only one company under this sector (SQL Wizard), but another company (Tambunting Financial Services), will make its debut next month under SME.

Do try to visit the How to Invest? thread and we’ll be happy to answer your questions.


KuyaDanny, si Hulk ang heavyweight, especially if you make him angry.:lol: Anyway, you are the ultimate expert and idol when it comes to investments.


Indeed!

[Hulk]

Originally posted by richyuppie


KuyaDanny, si Hulk ang heavyweight, especially if you make him angry.:lol: Anyway, you are the ultimate expert and idol when it comes to investments.


Indeed!

Tama si Kuya Danny, hindi ako heavyweight, overweight ako! :lol:

:frank:

[Spyfrat]

Originally posted by sam7268


sure you can ...;)

yudeeee naks may ka pex mate na sya :glee:
musta na gorgeous? miss chatting to u *wink*

[chuen10]

Try to read economics by samuelson, case & fair
and managerial finance by gitman
For trading, try any investment book by warren buffet =)

[computergeek]

thanks everybody, Your sincerity is greatly appreciated!!

[richyuppie]

Originally posted by Hulk

Tama si Kuya Danny, hindi ako heavyweight, overweight ako! :lol:

:frank:
Yup! Hulk is overweight in his portfolio. You should check out his overweight investments in China, New Zealand, and Switzerland. Hehehe.

Indeed!

[computergeek]

Originally posted by richyuppie

Yup! Hulk is overweight in his portfolio. You should check out his overweight investments in China, New Zealand, and Switzerland. Hehehe.

Indeed! ;) :D
?????

[Hulk]

Originally posted by richyuppie

Yup! Hulk is overweight in his portfolio. You should check out his overweight investments in China, New Zealand, and Switzerland. Hehehe.

Indeed!


Sshhhh... :sssh: Secret yung mga accounts ko sa Switzerland, baka ma-demanda ako ng money laundering! :lol:


:frank:

[JiGgLy]

Hi, computergeek. Nung una di ko rin maintindihan. Once I took Accounting classes and Business and Management classes, I finally got the idea.

May nagsabi na ba sayo na you can actually visit the PSE in Makati, kaya lang you would have to go early kasi they close agad. Maybe you'll learn a lot there.

[richyuppie]

Originally posted by Hulk

Sshhhh... :sssh: Secret yung mga accounts ko sa Switzerland, baka ma-demanda ako ng money laundering! :lol:


:frank:
Eh paano yung mga investments and hidden accounts mo sa Cayman Islands?? Hehehe:lol:

Indeed!

[Hulk]

Originally posted by richyuppie

Eh paano yung mga investments and hidden accounts mo sa Cayman Islands?? Hehehe:lol:

Indeed!

I don't have accounts in the Cayman Islands! I do however have accounts in Vanuatu! Not familiar with the country? Don't worry di rin siya alam ng BIR! :lol:


:frank:

[arrowhead30]

Hi guys... not sure if this is the right thread but I'm gonna hurl my question out anyway :)

How are derivatives sold or traded here in the philippines? (in other words, do we have primary and secondary markets for derivatives?)

I'm been wanting to know this for ages but I just haven't ben getting the answers.

anyway... thanks in advance :)

[Hulk]

Originally posted by arrowhead30
Hi guys... not sure if this is the right thread but I'm gonna hurl my question out anyway :)

How are derivatives sold or traded here in the philippines? (in other words, do we have primary and secondary markets for derivatives?)

I'm been wanting to know this for ages but I just haven't ben getting the answers.

anyway... thanks in advance :)

First of all, only financial institutions with a Derivatives license could deal in derivatives trading. Currently there are only a handful of financial institutions with this license.

Most derivatives are currency-oriented. Actually the bulk are currency forwards which are personal in nature unlike futures. You could also buy currency options but at very disadvantageous premiums.

We also don't have a futures exchange (i.e. SIMEX). We did have one before, the MIFE, unfortunately it failed in its objectives and was eventually closed by the SEC.


:frank:

[arrowhead30]

thanks hulk!

just curious ulit... what kinds of financial intermediaries usually have these derivatives licence? also... is it always an over-the-counter transaction?

how about stock options?

lastly, is there a secondary market for the derivatives you've mentioned?

[Hulk]

Originally posted by arrowhead30
thanks hulk!

just curious ulit... what kinds of financial intermediaries usually have these derivatives licence? also... is it always an over-the-counter transaction?

how about stock options?

lastly, is there a secondary market for the derivatives you've mentioned?

The body that grants derivatives licenses is the Bangko Sentral ng Pilipinas. Presently there are only a handful of universal banks (mostly foreign) and an investment house who currently have the license.

If by secondary market you mean transactions between originators of the derivatives and end-users, meron. Products like currency forwards, swaps, and options are over-the-counter products.

Stock options? Well I've never worked for a stock broker, pero I think wala pa, other than those given in the form of a compensation. I think for these types of products to emerge you have to have a deeper cash market for stocks, and the ability to widely borrow and short securities for long periods of time, elements that are still lacking in our market. The closest thing we have are stock warrants.

I think a while back there was plan of index trading for the PSE pero so far they haven't come up with it yet.

Commodities trading on the other hand is still several years away. A friend of mine who worked in Shell before had to use the SIMEX to hedge herself against changes in the prices of crude.


:frank:

[SILENTMAX]

question lang po

are there any brokerage firms here in the philiphines that deals with the nyse or nasdaq.
pwede ba akong mag invest sa foreign exchanges kahit nasa ibang country?

[Hulk]

Originally posted by SILENTMAX
question lang po

are there any brokerage firms here in the philiphines that deals with the nyse or nasdaq.
pwede ba akong mag invest sa foreign exchanges kahit nasa ibang country?

I believe there are local brokerage firms that deal with foreign bourses. Problem is I don't know which one. Hopefully either richyuppie or spyfrat will be able to browse this thread and give light to the situation.

If you're a big-time player, you could also use foreign houses such as JP Morgan and Merrill Lynch, firms normally based in either Singapore or Hong Kong. We use these investment houses to get the hottest IPOs from all over the world.


:frank:

[Spyfrat]

yup u can nvest online. daming online broker to choose from. etrade.com, datek.com to name a few. for those who na fast trader/daytrader/short term trader i recommend using tradescape pro found at tradescapeonline.com (etrade rin may-ari nito). sa etrade meron silang $4.95 na comm if u can make 30 trades in a quarter. what's best if u can make that much trade, ipapagamit nila sa yo nnag libre yung power etrade nila, yung may level 2 facility of which u can identify which marker makers ang buy and sell as well know the strength of the buy/sell volume.
merrill-online pagkakaalam ko requires a minimum amount of $500k, whereas sa etrade or datek mga $500-$1000 lang yata.
u can inquire sa site nila, apply online and wire the money using a foreign bank, preferrably hsbc. madali lang yan, magpapadala sila nang notification thru email na nakuha na nilal yung deposit mo. take note as well yung tracking number nang wire mo para u can ask them toll free or thru 24/7 online help kung nakuha na nila yung pera mo using the tracking number. then u can start trading. if $2k or below yung deposit mo automatic cash account ka, meaning u can only nvest (invest means buy & sell) on that amount. if above $2k, u have the option na maging margin account, meaning u can use at least 50% of that $2k ($1k, depende sa stock na e nvest mo, the stable the stock the bigger the margin) for investiment rin, so instead of $2k lang ang pang buy mo, pwede ka buy nang $3k worth pero may interest yung $1k na inutang mo o margin. now what's good sa margin is that, you can "short" stock as well, unlike sa cash account na nd ka pwede mag short. and consequence lang sa margin is that if ur highly marginalized at bumagsak nang malaki ang stock mo, ma margin call ka, kung wala kang pang cover/deposito sa margin call mo, ma force to sell ka which will result to heavy losses or maubos yung pera mo. hope this helps.

btw im trading US market but it's not my money im invetsing with.

[dekster]

question ulit...

how does index hedging work?

[Spyfrat]

hmmmm give lang kita idea pero can't give u the catch of the real trades. kung baga theory lang, iba kasi sa actual, not that far pero may mga tricks yung actual trading.

dami klase nang hedging but the one im comfortable is ndex hedging using MSFT (microsoft) or INTC (intel).

yung index tracker na stock nang nasdaq100 (NDX.X) is QQQ. bali ang mangyayari, short ka either sa QQQ or MSFT/INTC and long sa isa. say, if short ka sa QQQ, long ka sa MSFT or INTC.

ang catch dyan (opss hehe) is that u dont care which way the market goes, wala kang paki kung bear o bull, o akyat to o bagsak, what matters most is yung volatility. I used MSFT/INTC kasi mga biggies yan, silang 2 lang ang sama in all ndexes (dow, nasdaq, at s&p). kung down yung msft o intc nang malaki, maiinfluence nito ang market, same rin kung up. So kung short ka sa QQQ (Nasdaq) and long sa MSFT, ang profit mo dito is yung spread between the two stocks. Like down ang QQQ nang 2pts and mSFT down 1. Kung short ka sa QQQ, gain ka 2 pts, pero talo sa MSFT nang 1 pt. overall gain ka nang 1 pt. thats the time na close mo position. Yung weighing kung ilang shares sa MSFT at QQQ ang nd ko masasabi sa yo boss. hope u understand.

btw dont use percentage kasi ma coconfuse ka lang. kasi d ba kung ang isang stock galing from $10 at nag $20, tubo nun is 100%. pero kung ang isang stock galing $20 to $10, 50% loss lang yun d ba? kaya bawal yung percentage na computation dyan

Dito sa PSE meron rin hedging. But shorting is not allowed yet. pero may paraan ang mga brokers sa mga clients nila to accomate this facility.

[Hulk]

Yup Spyfrat is right. In his example, the portfolio manager is mathematically reducing his risk specific to the index since Microsoft and Intel are significant components of NASDAQ. If you want a clearer explanation as to how risk is reduced, medyo aabot yung discussions natin sa calculus at greek alphabet. :lol:


:frank:

[dekster]

hehe... did you guys learn this in school or at work na?

anyway, thanks again guys. You've all been really helpful :)

arrowhead30

[dekster]

Originally posted by Hulk

If by secondary market you mean transactions between originators of the derivatives and end-users, meron. Products like currency forwards, swaps, and options are over-the-counter products.



diba primary market pag nagkakaroon ng trades between originators and end-users? what I meant by secondary market is like the stock exchange wherein end-users trade stocks with one another and not the issuer of the stock.

just checking :)

[sk4]

pwede po magtanong?.... kasi, ive come across a reading na pwede maginvest sa stocks kahit tipong 5t lang ang money ko... i would like to have a clear idea kung pano mag-invest sa stocks... kung sino ang dapat kausapin... basically, somebody to guide me... gusto ko sana mag-invest pero wala akong knowledge with this... engr grad din ako eh!:(

sana you cud also help me...para lahat tayo yumaman!:)

[Spyfrat]

wats wrong ba kung engr? hehe. im an electrical engr.
btw there's this thread yata "How to Invest" na nandoon yung explanation re how much to invest, sort like that. :)

[Hulk]

Originally posted by dekster


diba primary market pag nagkakaroon ng trades between originators and end-users? what I meant by secondary market is like the stock exchange wherein end-users trade stocks with one another and not the issuer of the stock.

just checking :)

He! he! he! We're getting our participants and products mixed up. If you're talking about stocks you're probably right. :)

Govt. securities and other fixed-income instruments:
Primary: Between the originator and gseb/investment house/bank
Secondary: Between financial institutions
Tertiary: Between financial institutions and end-users

The difference is that in stocks, end-users could directly purchase their stocks through IPOs by giving their orders through the underwriter. In government securities however, it's the Government Securities Eligible Bidder (GSEB) who purchases the securities for their own position and distributes it to the end-users.

In the case of the derivatives that I mentioned (i.e currency swaps, currency forwards and currency options) the originators or the "writers" of the derivatives are the financial institutions themselves and not a third-party like a corporation. These derivatives are personal contracts between writer and buyer, unlike stocks which are tradeable.

Hope that clears everything up. *okay*


:frank: