PSE Lec2
- 1. Investing in the Stock MarketA presentation prepared by the Market Education Department Capital Markets Development Divisionwebsite: www.pse.com.phe-mail: marketeducation@pse.com.phtel.no: (632) 688-7536www.facebook.com/pages/The-Philippine-Stock-Exchangehttp://twitter.com/PhStockExchangehttp://thephilstockexchange.multiply.com
- 2. Table of Contents Stocks
- 3. Stock Market
- 4. Stocks: Types, classes, and forms
- 6. Concept of Risks and Rewardswww.pse.com.ph
- 7. Table of ContentsPrimary and Secondary Markets
- 8. Opening a Trading Account
- 10. Understanding Stock Market Quotes
- 11. Sources of Market Informationwww.pse.com.ph
- 12. STOCKDefinition and conceptSTOCKSare shares of ownership in a corporation. When you buy stocks of a publicly listed company, you become a stockholder or shareholder of that company. In other words, you become a part owner. Thus, you participate in the company’s growth and future profits. Conversely, you may also lose if the company suffers a loss or performs below market expectations.www.pse.com.ph
- 13. STOCK MARKETDefinition and conceptSTOCK MARKET is a place where stocks are bought and sold. The Philippine stock market is the place where people can invest in publicly listed corporations.www.pse.com.ph
- 14. STOCKSAccording to typesPREFERRED STOCK is a security whereby the holder has a higher claim on the assets and earnings of the company. Preferred shareholders have priority over common shareholders in the event of liquidation and they have a fixed dividend. Unlike common shareholders, preferred shareholders do not have voting rights.COMMON STOCK is security whereby the holder exercise control by electing board of directors and voting on corporate policies or matters. In the event of liquidation, common stockholders have rights to the company’s assets only after preferred stockholders have been paid in full. www.pse.com.ph
- 15. STOCKSAccording to classCLASS ASTOCKS are shares that can be bought or sold solely by Filipino investors.CLASS BSTOCKS are shares that can be bought or sold by both Filipinos and foreign investors.www.pse.com.ph
- 16. STOCKSOther types BLUE CHIPS are the share of stable, profitable, and well-known public companies.They have a long history of steady revenues and dividend payments. They exhibit more modest but dependable returns and are relatively of lower risk. www.pse.com.ph
- 17. STOCKSOther types INCOME STOCKS are equity security that pays regular, often steadily increasing dividends, and offers a high yield that may generate the majority of overall returns. It has a lower level of volatility than the overall stock market. www.pse.com.ph
- 18. STOCKSOther types GROWTH STOCKS are shares of corporations whose earnings are expected to grow at an above-average rate relative to the market.A growth stock does not usually pay dividend. Rather, earnings are reinvested in capital projects. www.pse.com.ph
- 19. STOCKSOther types DEFENSIVE STOCKS are shares that provide constant dividend and stable earnings, regardless of the overall condition of the stock market.They remain stable during the various stages of the business cycle.www.pse.com.ph
- 20. STOCKSOther types CYCLICAL STOCKS are those that rise quickly when economic growth is strong and falls rapidly when growth is slowing down. www.pse.com.ph
- 21. STOCKSOther types SPECULATIVE STOCKS are those that rise quickly when economic growth is strong and falls rapidly when growth is slowing down. www.pse.com.ph
- 22. INVESTMENT INSTRUMENTSFixed Income vs. Variable IncomeFIXED INCOME INSTRUMENTS are those that provide a return in the form of fixed period payments and the eventual return of principal at maturity. Examples are savings, Treasury bills, and government bonds.VARIABLE INCOME INSTRUMENTS are those that provide a return based on an underlying measure such as short-term interest rates. www.pse.com.ph
- 23. RISK AND REWARDInvestment PyramidRISK PROFILEThe RISK-REWARD Concept: The higher the risk of an investment instrument, the higher returns you should receive in the future.www.pse.com.ph
- 24. TYPES OF MARKETSPrimary and Secondary MarketsPRIMARY MARKETThe higher the risk of an investment instrument, the higher returns you should receive in the future.www.pse.com.ph
- 25. TYPES OF MARKETSPrimary and Secondary MarketsSECONDARY MARKETis where investors purchase securities or assets from other investors, rather than from issuing companies themselves. www.pse.com.ph
- 26. OPENING A TRADING ACCOUNTInvestment ProceduresSelect your STOCKBROKER.
- 27. Open a TRADING ACCOUNT.
- 28. Discuss with your broker the stocks you wish to BUY or SELL.Give ORDERS to the brokers.
- 29. Get the CONFIRMATION RECEIPT.
- 30. Deliver / pay before SETTLEMENT DATE.
- 32. TRADING SCHEDULEDay and Time9:00 AM – 9:15 AM PRE-OPEN9:15 AM – 9:30 AM PRE-OPEN (No cancellation period)9:30 AM MARKET OPEN9:30 AM – 11:57 AMCONTINUOUS TRADING11:57 AM – 11:59 AMPRE-CLOSE (No cancellation period)12:00 NN MARKET CLOSE12:00 NN – 12:10 PMTRADING AT-LAST (Run off)12:10 PMMARKET CLOSEwww.pse.com.ph
- 33. STOCK MARKET QUOTATIONSNAMEThe stock symbol of the listed company.OPENThe first price the stock traded for the day.BIDThe highest buying price in the market.ASKThe lowest selling price in the market.HIGHThe highest price traded for the period.LOWThe lowest price traded for the period.CLOSEThe last traded price of the stock at noon of the trading dayReading and Analyzingwww.pse.com.ph
- 34. STOCK MARKET QUOTATIONSReading and AnalyzingVOLUME OF SHARESThe total number of shares traded in the stock market during a period.VALUE OF SHARESThe currency value of shares traded in the market during a period.www.pse.com.ph
- 35. STOCK MARKET QUOTATIONSReading and AnalyzingPHILIPPINE STOCK EXCHANGE COMPOSITE INDEX (PSEi)is a fixed basket of 30 common stocks of listed companies, carefully selected to represent the general movement of the stock market. It is the benchmark measuring the performance of the Philippine stock market.The selection of these companies is based on a specific set of criteria.www.pse.com.ph
- 36. STOCK MARKET QUOTATIONSReading and AnalyzingGAINERSThe stocks with the highest percentage increase in price during a period.LOSERSThe stocks with the highest percentage decrease in price during a period.MOST ACTIVEThe stocks with the most frequent transaction during a period.www.pse.com.ph
- 37. SOURCES OF INFORMATIONBroadsheets and Daily Quotationswww.pse.com.ph
- 38. SOURCES OF INFORMATIONTelevision and Radiowww.pse.com.ph
- 39. SOURCES OF INFORMATIONData Providerswww.pse.com.ph
- 40. SOURCES OF INFORMATIONInternetPSE / MED SOCIAL SITESOFFICIAL PSE WEBSITEThe Philippine Stock Exchange, Inc.http://thephilstockexchange.multiply.comwww.pse.com.phhttp://twitter.com/PhStockExchangewww.pse.com.ph
- 41. SOURCES OF INFORMATIONElectronic Billboardswww.pse.com.ph
- 42. Investing in the Stock MarketA presentation prepared by the Market Education Department Capital Markets Development Divisionwebsite: www.pse.com.phe-mail: marketeducation@pse.com.phtel.no: (632) 688-7536www.facebook.com/pages/The-Philippine-Stock-Exchangehttp://twitter.com/PhStockExchangehttp://thephilstockexchange.multiply.com