Stock market in philippines

1. Stock Market in Philippines Nikita Pandey

2. Introduction The  Philippine Stock Exchange ( PSE ) (Filipino:  Pamilihang Sapi ng Pilipinas ) is the national stock exchange  of the  Philippines . It is one of the oldest stock exchanges in  Southeast Asia , having been in continuous operation since its inception in 1927. The main index for PSE is the  PSE Composite Index  or PSEi , which is composed of thirty (30) listed companies. The selection of companies in the PSEi is based on a specific set of criteria. There are also six additional sector-based indices. The Philippine Stock Exchange PSEi Index is a capitalization-weighted index composed of stocks representative of the Industrial, Properties, Services,Holding Firms, Financial and Mining & Oil Sectors of the PSE. 

3. Brief History Prior to March 1994, there were two stock exchanges in the Philippines: the Makati Stock Exchange, which began operations in 1963, and the Manila Stock Exchange, which was organized in 1927. Each exchange was self-regulating, governed by its respective board of governors elected annually by the members of each exchange. By mid-1992, the Philippine Securities and Exchange Commission (SEC) proposed that the two exchanges unify and operate under the Philippine Stock Exchange (PSE), an entity incorporated by the officers of both the Makati and Manila Stock Exchanges. On March 20, 1993, in a general meeting convened by the Philippine presidential committee organized to oversee the union of the two bourses, the members of the two exchanges agreed to a functional unification and to the employment of a full-time president to administer the PSE

4. The PSE implemented on March 25, 1994 an automated trading system linking the two exchanges. The system resulted in a single trading price for all listed securities and the consolidation of the Makati Stock Exchange and the Manila Stock Exchange into the PSE. Stock trading activities are now conducted by the PSE on two trading floors: one in Makati City and the other one in Pasig City.

5. In June 1998, the  Securities and Exchange Commission  (SEC) granted the PSE a "Self-Regulatory Organization" (SRO) status, which meant that the bourse can implement its own rules and establish penalties on erring trading participants (TPs) and listed companies. In 2001, one year after the enactment of the Securities Regulation Code, the PSE was transformed from a non-profit, non-stock, member-governed organisation into a shareholder-based, revenue-earning corporation headed by a president and a board of directors. The PSE eventually listed its own shares on the exchange (traded under the ticker symbol  PSE ) by way of introduction on December 15, 2003.

6. Historically, from 1986 until 2013, Philippines Stock Market ( PSEi ) averaged 2150 Index points reaching an all time high of 7392 Index points in May of 2013 and a record low of 130 Index points in February of 1986.

7. Current scenario The benchmark index is trading at 16.1 times  projected  12-month earnings, the cheapest since Nov. 23, from a record 20.8 times on May 15. That compares with MSCI  Emerging Markets Index’s 9.2 times. The Philippine gauge’s 30-day  volatility  climbed to 38.5, the highest since January 2009. Ayala Corp. (AC) , owner of the nation’s largest builder and biggest bank by market value, tumbled 9.2 percent, the steepest loss since Oct. 27, 2008. It was the biggest contributor to the index’s decline today. Belle Corp. (BEL) , which is building a Manila casino with Melco Crown Entertainment Ltd., plunged 12 percent, the sharpest loss since Feb. 28, 2007.  Aboitiz Equity Ventures Inc. (AEV) , which has investments in power and banks, sank 5.9 percent to the lowest close since Dec. 28, 2011.

8. What is the role of the PSE ?   The PSE bring together companies which aim to raise capital through the issue of new securities. Through the listing of their share in the stock exchange, companies can have easier access to funds. Raising new capital through an additional public offering is easier and less expensive when the company is already listed in the Exchange. Therefore, 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. Furthermore, the PSE 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.   Apart from these functions, 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.

9. Efficient        This means that orders are executed and transactions are settled in the fastest possible way. Some reforms have been instituted or are being carried out by the PSE to make the market more efficient, such as:         installation of fully automated trading system ;        installation of computer trading terminals in cities outside Metro Manila to encourage the entry of provincial investors; and creation of a central cleaning and depository system to mobilized stock certificates and allow transfer of shares and funds by book entry. Fair       This means that the PSE assures that no investor will have an undue advantage over another ,market player in trading by manipulating prices and engaging into insider trading. Insider trading is the act of buying or selling a particular stock based on certain privileged information which is not available to the public. As such it is considered as illegal and prohibited by the PSE .   Market Transparency       Transparency proceeds from the assumption that the investor can only make informed and intelligent information about the particular sock he wants to buy. The PSE requires listed companies to disclose timely, complete and accurate material information to the Exchange and the public on a regular basis. Such information would include stock price information, corporate conditions and developments which tend to affect stock prices like dividend, mergers and joint ventures, and the like.

10. The peso rose 0.9 percent to the dollar, paring this month’s loss to 2.8 percent, the worst performance in  Asia  after the Indian rupee and Malaysian ringgit. The yield on 8 percent government bonds due July 2031 fell 50 basis points to 5.25 percent, according to Tradition Financial Services prices as of 4:06 p.m. The rate rose 5 basis points earlier. “It’s not a question of valuations anymore,” Rico Gomez, who helps manage $2.8 billion at Rizal Commercial Banking Corp., said. “It’s a matter of the level of risk that investors are willing to take.” Six of the 30-stocks in the nation’s equities benchmark index are trading at a  52-week low , the most since September 2011, according to data compiled by Bloomberg. The 14-day relative strength index for 13 of the index’s stocks is below 30, a signal to some investors that shares are poised to rise.

11. The local bourse was ranked as the fifth top-performing stock market globally, with CNN Money noting growth of 20 percent as of April 24. The Philippine stock market was topped only by the of Kuwait, which grew by 23 percent; Argentina, 27 percent; United Arab Emirates, 28 percent; and Japan, 34 percent.

12. THANK YOU.