Philippine Stock Investing

2009-01-21T11:11:00.000-08:00


Phil Composite Index 1day	Hongkong Index 1day	Japan Nikkei 1day

US Markets

Gold 24hrs

Oil Nymex Futures

Copper 24hrs

Portfolio Transaction Wk27/28-2009

2008-07-16T19:45:00.000-07:00

July 01-16, 2009
Bought more AGI P2.95, P3.25
Bought PX @ P7.40, 7.60
Bought more MEG P1.02, 1.04

Portfolio Transaction Wk25-2009

2008-06-21T07:05:00.000-07:00

June 15-19, 2009
Sold some URC @ P8.30
Boughtback URC @ P7.10 & more @ P6.90
Sold some PAX @ P2.30
Bought more MEG P1.04
Bought more AGI P2.75

Phil. Stock Portfolio Performance

2008-06-19T03:24:00.000-07:00

PORTFOLIO Year-To-Date (2011YTD) PERFORMANCE o/l to PSE Sub-indices

PORTFOLIO PERFORMANCE - (Inception-to-Date)

PORTFOLIO COMPONENTS & ASSET TYPE ALLOCATION

Portfolio Transaction Wk24-2009

2008-06-13T00:59:00.000-07:00

June 8-11, 2009
Bought more MEG @ P1.22
Sold some MEG 1.20, 1.18, buyback @ P1.14 not hit
Sold all JGS @ P5.10
Bought more URC P7.60
Bought more AGI P3.00

Portfolio Transaction Wk23-2009

2008-06-05T10:50:00.000-07:00

June 1-5, 2009
Bought more MEG @ P1.12, & more @ P1.06
Sold some JGS @ P5.30
Sold some PAX @ P3.00
Boughtback some PAX @ 2.90

Portfolio Transaction Wk22-2009

2008-05-29T11:21:00.000-07:00

May 25-29, 2009
Sold 50% PAX @ P2.90, P2.75
Bought more JGS @ P4.90
Boughtback PAX @ 2.55

Portfolio Transaction Wk21-2009

2008-05-23T06:58:00.000-07:00

May 18-22, 2009
Sold all ALI @ P7.8, P7.9
Sold all SMPH @ P8.40
Bought MEG @ 0.97,0.98, 0.94
Bought more PAX @ 1.72, 1.84, 1.86, 2.02

Portfolio Transaction Wk20-2009

2008-05-15T09:30:00.000-07:00

Mon (11/05)
Cash infusion 12%
Sold some AGI @ P2.60/shr
Tue (12/05)
Sold 50% AC @ P246/shr
Bought PAX @ P1.30/shr
Bought more ALI @ P7.30/shr
Wed (13/05)
Bought more NRCP @ P1.56/shr
Thu (14/05)
Bought more PAX @ P1.34/shr
Fri (15/05)
Bought more PAX @ P1.34/shr

Cut your losers and let your winners run

2008-05-08T22:31:00.000-07:00

The stock market Bull had been full of strength lately not only in the Philippines but around the world. Some stocks made enormous gains like for example Paxy's (PAX) a call center in the Phils. made an outstanding 31% gain last Friday alone and 52% in one week gain. Another is Alliance Global Inc (AGI) a holding company also in Phils jumps 32% this week alone. This brings a question in my mind , is it time to cash our “paper” gains and run?
Then I found a newsletter article in my inbox that answers all this questions, based on my many years of experience in stock trading or investing, big money can be made by following this style and wanted to share with you here. Happy weekend everyone.

In 1993, my father did something incredibly nice for me...

He entrusted me to manage $100,000 of his money.

This was far from pocket change... My dad was a career Navy man, and my mom a schoolteacher – not exactly get-rich-quick professions. And neither of them came from money.

I was just starting out as a stockbroker. I have the full academic education in finance, all the way to a PhD. But looking back, the biggest financial education I ever received was from that $100,000...

The money was an enormous weight. This was my dad's IRA money... What if I screwed it up? I was determined not to lose it.

So in my dad's portfolio, I was conservative. I only bought "deep value" stocks and safe income plays. And I only bought once they'd fallen to the point where it seemed we couldn't possibly lose money. (And then they'd go down!)

I wish I could tell you I doubled or tripled his account in a few years. The reality is, it crept forward. And if I didn't have the "tailwind" of a slight uptrend in the market, it might have crept backward.

Meanwhile, I had a client in New York whose account was the same size as my dad's. Ellen was probably 70 years old. But she was not afraid of the markets...

"My dear, what's Malaysia Fund doing today?" she'd ask.

"It's around $16," I'd tell her. The stock was up from where she bought it.

"Buy me some more of it," she'd say.

"But Ellen, you've already got a big stake in this one, and you can't lose this money. Are you sure?"

"Buy me some more of it."

"OK."

A few weeks would go by. Then we'd have the same conversation, only the fund was $2 higher...

"Where's Malaysia Fund today?"

"It's around $18."

"Buy me some more of it."

"Are you sure? This is really getting to be a big stake here..."

"Buy me some more of it."

Ellen's account was going up in nearly every position. Meanwhile, my dad's account was just treading water. My main goal was not to lose his money. I was scared to take a risk. So I wasn't making him much money.

A couple more months went by. I got the same call from Ellen. With the Malaysia Fund at $23, she bought even more.

At this point, I didn't really protest. I didn't tell her this... but it seemed to me she was better at this than I was. Heck, she'd been at it longer than me.

When a stock my dad owned went up 20%, we sold it. I could hardly wait to lock in a profit. Meanwhile, this little old lady from New York was doing the opposite... When a stock Ellen owned went up 20%, she was buying more. And she was making real money.

I wish this story had a happy ending. But like most individual investors, Ellen didn't have any "exit strategy." She didn't use trailing stops or anything else. Instead, she made the all-too-human error of hanging on too long.

In other words, she only got it half right.
The easiest lesson of successful investing: Cut your losers and let your winners run.

Nobody taught us that in business school. But around the time I was working with Ellen, I read the book Market Wizards, by Jack Schwager. The guys in the book made their fortunes in various ways... but there was one common thread: These successful traders simply tried to catch the majority of an uptrend (let their winners ride) and avoid the big downtrends (cutting their losers using things like trailing stops).

Trailing stops have helped you ride the big uptrends and avoid the big downtrends. (And if you haven't been using them, I hope the experience of the last few years is proof of their value...)

If you want to make a lot of money in the markets... and not lose much when your stocks go down... then you need to follow the Market Wizards and Ellen and let your winners ride. More importantly, you need an exit strategy to cut your losers early so you can always keep your account heading in the right direction – up.

Portfolio Transaction Wk19-2009

2008-05-08T10:17:00.000-07:00

Mon(04/05)
20% Capital added
Bought RLC @ P5.60
Tue (5/05)
Bought more AGI @ P2.0
Bought more URC @ P7.20
Sold RLC @ P6.10
Sold 30% AGI @ P2.08
Sold all AC P243/share
Wed (6/05)
Bought more AGI @ P2.10/2.12 (doubling position)
Bought ALI @ P6.90
Sold SMPH @ P8.60/share
Sold JFC @ P47/share
Thu (7/04)
Bought AC P247/share
Fri (8/05)
Bought more AGI @ P2.28
Sold all EDC @ P3.80

Portfolio Transaction Wk18-2009

2008-05-02T12:01:00.000-07:00

Thu (29/04)
Bought more AC P216/share
All previous stock positions remains the same.

Portfolio Transaction Week17 - 2009

2008-04-24T21:58:00.000-07:00

Tue (21/04)
Sold all PAX P0.82/share , Cutloss
Boughtback more AGI P1.64/share
Wed (22/04)
Boughtback more AGI P1.66/share
Thu (23/04)
Boughtback more AGI P1.60/share
All previous stock positions remains the same.

Portfolio Transaction Week16 - 2009

2008-04-17T10:22:00.000-07:00

Thu (16/04)
Sold IP P1.38/share
Fri (17/04)
Sold 50% AGI P1.82/share
Bought EDC P3.60/share
All previous stock positions remains the same.

THE DEADLY ART OF STOCK MANIPULATION....

2008-04-09T04:45:00.000-07:00

Sharing this article, especially to the newbies in the stock market, a must read to everyone who speculate in stocks.

THE DEADLY ART OF STOCK MANIPULATION....

In every profession, there are probably a dozen or two major rules. Knowing them cold is what separates the professional from the amateur. Not knowing them at all? Well, let's put it this way: How safe would you feel if you suddenly found yourself piloting (solo) a Boeing 747 as it were landing on an airstrip? Unless you are a professional pilot, you would probably be frightened out of your wits and would soil your underwear. Hold that thought as you read this essay because I will explain to you how market manipulation works.

In order to successfully speculate, one should presume the following: THE SMALL CAP STOCK MARKETS PRIMARILY EXIST TO FLEECE YOU! I'm talking about Vancouver, Alberta, the Canadian Dealing Network and the US Over-the Counter markets (Pink Sheets, Bulletin Board, etc.). One could also stretch this, with many stocks, to include the world's senior stock markets, including Toronto, New York, NASDAQ, London, etc. The average investor or speculator is not very likely to have much success in the small cap crapshoots. I guess that is what attracted ME to these markets. I have been trying, for quite some time, to answer this question, "How come?" Now, I know. And you should, too!

By the way, the premise of these books is uniformly: "While these speculative companies do not actually make any money, one can profit by speculating in these companies." THAT is the premise on how these markets are run, by both the stock promoters, insiders, brokers, analysts and others in this industry. That logic is flawed in that it presumes "someone else" is going to end up holding the dirty bag. Follow this premise all the way through and you will realize the insane conclusion: For these markets to continue along that route, new suckers have to continue coming into the marketplace. The conclusion is insane in that such mad activity can only be short-lived. I disagree with this premise and propose another solution (see my earlier essay: A Modest Proposal) at the end of this essay.

What the professionals and the securities regulators know and understand, which the rest of us do not, is this.

"RULE NUMBER ONE: ALL SHARP PRICE MOVEMENTS -- WHETHER UP OR DOWN -- ARE THE RESULT OF ONE OR MORE (USUALLY A GROUP OF) PROFESSIONALS MANIPULATING THE SHARE PRICE."

This should explain why a mining company finds something good and "nothing happens" or the stock goes down. At the same time, for NO apparent reason, a stock suddenly takes off for the sky! On little volume! Someone is manipulating that stock, often with an unfounded rumor.

In order to make these market manipulations work, the professionals assume: (a) The Public is STUPID and (b) The Public will mainly buy at the HIGH and (c) The Public will sell at the LOW.
Therefore, as long as the market manipulator can run crowd control, he can be successful.

Let's face it: The reason you speculate in such markets is that you are greedy AND optimistic. You believe in a better tomorrow and NEED to make money quickly. It is this sentiment which is exploited by the market manipulator. He controls YOUR greed and fear about a particular stock. If he wants you to buy, the company's prospects look like the next Microsoft. If the manipulator wants you to desert the sinking ship, he suddenly becomes very guarded in his remarks about the company, isn't around to glowingly answer questions about the company and/or GETS issued very bad news about the company. Which brings us to the next important rule.

"RULE NUMBER TWO: IF THE MARKET MANIPULATOR WANTS TO DISTRIBUTE (DUMP) HIS SHARES, HE WILL START A GOOD NEWS PROMOTIONAL CAMPAIGN."

Ever wonder why a particular company is made to look like the greatest thing since sliced bread? That sentiment is manufactured.
Newsletter writers are hired -- either secretly or not -- to cheerlead a stock. PR firms are hired and let loose upon an unsuspecting public. Contracts to appear on radio talk shows are signed and implemented. Stockbrokers get "cheap" stock to recommend the company to their "book" (that means YOU, the client in his book). An advertising campaign is rolled out (television ads, newspaper ads, card deck mailings). The company signs up to exhibit at "investment conferences" and "gold shows" (mainly so they can get a little "podium time" to hype you on their stock and tell you how "their company is really different" and "not a stock promotion.") Funny little "hype" messages are posted on Internet newsgroups by the same cast of usual suspects. The more, the merrier. And a little "juice" can go a long way toward running up the stock price.

The HYPE is on. The more clever a stock promoter, the better his knowledge of the advertising business. Little gimmicks like "positioning" are used. Example: Make a completely unknown company look warm and fuzzy and appealing to you by comparing it to a recent success story, Diamond Fields or Bre-X Minerals. That is the POSITIONING gospel, authored by Ries and Trout (famous for "Avis: We Want To Be #1" and "We Try Harder" and other such slogans). These advertising/PR executives must have stumbled onto this formula after losing their shirts speculating in a few Canadian stock promotions! The only reason you have been invited to this seemingly incredible banquet is that YOU are the main course. After the market manipulator has suckered you into "his investment," exchanging HIS paper for YOUR cash, the walls begin to close in on you. Why is that?

"RULE NUMBER THREE: AS SOON AS THE MARKET MANIPULATOR HAS COMPLETED HIS DISTRIBUTION (DUMPING) OF SHARES, HE WILL START A BAD NEWS OR NO NEWS CAMPAIGN."

Your favorite home-run stock has just stalled or retreated a bit from its high. Suddenly, there is a news VACUUM. Either NO news or BAD rumors. I discovered this with quite a few stocks. I would get LOADS of information and "hot tips." All of a sudden, my pipeline was shut-off. Some companies would even issue a news release CONDEMNING me ("We don't need 'that kind of hype' referring to me!). Cute, huh? When the company wanted fantastic hype circulated hither and yon, there would be someone there to spoon-feed me. The second the distribution phase was DONE....ooops! Sorry, no more news. Or, "I'm sorry. He's not in the office." Or, "He won't be back until Monday."

The really slick market manipulators would even seed the Internet news groups or other journalists to plant negative stories about that company. Or start a propaganda campaign of negative rumors on all available communication vehicles. Even hiring a "contrarian" or "special PR firm" to drive down the price. Even hiring someone to attack the guy who had earlier written glowingly about the company. (This is not a game for the faint-hearted!)

You'll also see the stock drifting endlessly. You may even experience a helpless feeling, as if you were floating in outer space without a lifeline. That is exactly HOW the market manipulator wants you to feel. See Rule Number Five below. He may also be doing this to avoid the severe disappointment of a "dry hole" or a "failed deal." You'll hear that oft-cried refrain, "Oh well, that's the junior minerals exploration business... very risky!" Or the oft-quoted statistic, "Nine out of 10 businesses fail each year and this IS a Venture Capital Startup stock exchange." Don't think it wasn't contrived. If a geologist at a junior mining company wasn't optimistic and rosy in his promise of exploration success, he would be replaced by someone who was! Ditto for the high-tech deal, in a world awash with PhD's.

So, how do you know when you are being taken? Look again at
Rule #1. Inside that rule, a few other rules unfold which explain how
a stock price is manipulated.

"RULE NUMBER FOUR: ANY STOCK THAT TRADES HUGE VOLUME AT HIGHER PRICES SIGNALS THE DISTRIBUTION PHASE."

When there was less volume, the price was lower. Professionals were accumulating. After the price runs, the volume increases. The professionals bought low and sold high. The amateurs bought high (and will soon enough sell low). In older books about market manipulation and stock promotion, which I've recently studied, the markup price referred to THREE times higher than the floor. The floor is the launchpad for the stock. For example, if one looks at the stock price and finds a steady flatline on the stock's chart of around 10 cents, then that range is the FLOOR. Basically, the markup phase can go as high as the market manipulator is capable of taking it. From my observations, a good markup should be able to run about five to ten times higher than the floor, with six to seven being common. The market manipulator will do everything in his power to keep you OUT OF THE STOCK until the share price has been marked up by at least two-three times, sometimes resorting to "shaking you out" until after he has accumulated enough shares. Once the markup has begun, the stock chart will show you one or more spikes in the volume -- all at much higher prices (marked up by the manipulator, of course). That is DISTRIBUTION and nothing else.

Example: Look at Software Control Systems (Alberta:XVN), in which I purchased shares after it had been marked up five times.
There were eight days of 500,000 (plus) shares trading hands, with one day of 750,000 shares trading hands. Market manipulator(s) dumping shares into the volume at higher prices. WHENEVER you see HUGE volume after the stock has risen on a 75 degree angle, the distribution phase has started and you are likely to be buying in -- at or near the stock's peak price.

Example: Look at Diamond Fields (TSE FR), which never increased at a 75 degree angle and did not have abnormal volume spikes, yet in less than two years ran from C$4 to C$160/share.

Example: Look at Bre-X Minerals (Alberta:BXM), which did not experience its first 75 degree angle, with huge volume until July 14th, 1995. The next two trading days, BXM went down and stayed around C$12/share for two weeks. The volume had been 60% higher nearly a month earlier, with only a slight price increase. Each high volume and spectacular increase in BXM's share price was met with a price retreat and leveling off. "Suddenly," BXM wasn't trading at C$2/share; it was at C$170/share.... up 8500% in less than a year!

In both of the above cases, major Canadian newspapers ran extremely negative stories about both companies, at one time or another. In each instance, just before another share price run up, retail investors fled the stock! Just before both began yet another run up! Successful short-term speculators generally exit any stock run up when the volume soars; amateurs get greedy and buy at those points.

"RULE NUMBER FIVE: THE MARKET MANIPULATOR WILL ALWAYS TRY TO GET YOU TO BUY AT THE HIGHEST, AND SELL AT THE LOWEST PRICE
POSSIBLE."

Just as the manipulator will use every available means to invite you to "the party," he will savagely and brutally drive you away from "his stock" when he has fleeced you. The first falsehood you assume is that the stock promoter WANTS you to make a bundle by investing in his company. So begins a string of lies that run for as long as your stomach can take it.

You will get the first clue that "you have been had" when the stock stalls at the higher level. Somehow, it ran out of steam and you are not sure why. Well, it ran out of steam because the market manipulator stopped running it up. It's over inflated and he can't convince more people to buy. The volume dries up while the share price seems to stall. LOOK AT THE TRADING VOLUME, NOT THE SHARE PRICE! When earlier, there may have been 500,000 shares trading each day for eight out of 12 trading days (as in the case of Software Control Systems), now the volume has slipped to 100,000 shares (or so) daily. There are some buyers there, enough for the manipulator to continue dumping his paper, but only so long as he can enlist one or more individuals/services to bang his drum.

He may continue feeding the promo guys a string of "promises" and "good news down the road." (Believe me, this HAS happened to me!) But, when the news finally arrives, the stock price goes THUD! This is entirely orchestrated by a market manipulator. You'll see it in the trading volume, most of which is CONTRIVED. A market manipulator will have various brokers buying and selling the stock to give the APPEARANCE of increasing volume and price so that YOU do start chasing it higher.

At some point during the stall stage, investors get fed up with the non-performance of the stock. It drifts for a while, in a steady retreat, with perhaps a short-lived spike in price and volume (the final signal that the manipulator has finally offloaded ALL of his
paper). Then, the stock comes tumbling down -- having lost ALL of the earlier share appreciation.

Sometimes, with the more cruel manipulators, they will throw in a little false hope... giving you a little more rope so they can better hang you. Just after a severe drop, there will be a "bottom fishing" announcement which sends the share price up a bit on high volume, rises a little more after that and then continues to drift. Meanwhile, you keep getting "shaken out" through a cruel drip-drip water torture of the share price's slow retreat. Again, virtually every movement is completely orchestrated.

"RULE NUMBER SIX: IF THIS IS A REAL DEAL, THEN YOU ARE LIKELY TO BE THE LAST PERSON TO BE NOTIFIED OR WILL BE DRIVEN OUT AT THE LOWER PRICES."

Like Jesse Livermore wrote, "If there's some easy money lying around, no one is going to force it into your pocket." The same concept can be more clearly understood by watching the tape. When a market manipulator wants you into his stock, you will hear LOUD noises of stock promotion and hype. If you are "in the loop," you will be bombarded from many directions. Similarly, if he wants you out of the stock, then there will be orchestrated rumors being circulated, rapid-fired at you again from many directions. Just as good news may come to you in waves, so will bad news.

You will see evidence of a VERY sharp drop in the share price with HUGE volume. That is you and your buddies running for the exits. If the deal is really for real, the market manipulator wants to get ALL OF YOUR SHARES or as many as he can... and at the lowest price he can. Whereas before, he wanted you IN his market, so he could dump his shares to you at a higher price, NOW when he sees that this deal IS for real, he wants to pay as little as possible for those same shares... YOUR shares which he wants to you part with, as quickly as possible.

The market manipulator will shake you out by DRIVING the price as low as he can. Just as in the "accumulation" stage, he wants to keep everything as quiet as possible so he can snap up as many of the shares for himself, he will NOW turn down, or even turn off, the volume so he can repeat the accumulation phase.

In the mining business, there seems to always be another "area play" around the corner. Just as Voisey's Bay drifted into oblivion, during the fourth quarter of 1995 and early into 1996, the same Voisey Bay "wannabees" began striking deals in Indonesia. Some even used new corporate entities. Same crooks, different shingles. The accumulation phase was TOP SECRET. The noise level was deadingly silent. As soon as the insiders accumulated all their shares, they let YOU in on the secret.

"RULE NUMBER SEVEN: CONVERSELY, YOU WILL OFTEN BE THE LAST TO KNOW WHEN THIS DEAL SHOWS SIGNS OF FAILURE."

Twenty-twenty hindsight will often show you that there was a "little stumble" in the share price, just as the "assays were delayed" or the "deal didn't go through." Manipulators were peeling off their paper to START the downslide. And ACCELERATE it. The quick slide down makes it improbable for your getting out at more than what you originally paid for the stock... and gives you a better reason for holding onto it "a little longer" in case the price rebounds. Then, the drifting stage begins and fear takes over. And unless you have serves of steel and can afford to wait out the manipulator, you will more than likely end up selling out at a cheap price.

For the insider, marketmaker or underwriter is obliged to buy back all of your paper in order to keep his company alive and maintain control of it. The less he has to pay for your paper, the lower his cost will be to commence his stock promotion again... at some future date. Even if his company has no prospects AT ALL, his "shell" of a company has some value (only in that others might want to use that structure so they can run their own stock promotion). So, the manipulator WILL buy back his paper. He just wants to make sure that he pays as little for those shares as possible.

"RULE NUMBER EIGHT: THE MARKET MANIPULATOR WILL COMPEL YOU INTO THE STOCK SO THAT YOU DRIVE UP ITS PRICE SHARES."

Placing a Market Order or Pre-Market Order is an amateur's mistake, typifying the US investor -- one who assumes that thinly traded issues are the same as blue chip stocks, to which they are accustomed. A market manipulator (traders included here) can jack up the share price during your market order and bring you back a confirmation at some preposterous level. The Market Manipulator will use the "tape" against you. He will keep buying up his own paper to keep you reaching for a higher price. He will get in line ahead of you to buy all the shares at the current price and force you to pay MORE for those shares. He will tease you and MAKE you reach for the higher price so you "won't miss out." Miss out on what? Getting your head chopped off, that's what!

One can avoid market manipulation by not buying during the huge price spikes and abnormal trading volumes, also known as chasing the stock to a higher price.

"RULE NUMBER NINE: THE MARKET MANIPULATOR IS WELL AWARE OF THE EMOTIONS YOU ARE EXPERIENCING DURING A RUN UP AND A COLLAPSE AND WILL PLAY YOUR EMOTIONS LIKE A PIANO."

During the run up, you WILL have a rush of greed which compels you to run into the stock. During the collapse, you WILL have a fear that you will lose everything... so you will rush to exit. See how simple it is and how clear a bell it strikes? Don't think this formula isn't tattooed inside the mind of every manipulator. The market manipulator will play you on the way up and play you on the way down. If he does it very well, he will make it look like someone else's fault that you lost money! Promise to fill up your wallet? You'll rush into the stock. Scare you into losing every penny you have in that stock? You'll run away screaming with horror! And vow to NEVER, ever speculate in such stocks again. But many of you still do.... The manipulator even knows how to bring you back for yet another play.

What actors! No wonder Vancouver is sometimes called
"Hollywood North."

"FINAL RULE: A NEW BATCH OF SUCKERS ARE BORN WITH EVERY NEW PLAY."

The Financial Markets are a Cruel, Unkind and Dangerous Playing Field, one place where the newest amateurs are generally fleeced the most brutally.... usually by those who KNOW the above rules.

Just as I have a duty to ensure that each of you understand how this game is played, YOU now have that same duty to guarantee that your fellow speculator understands these rules. Just as I would be a criminal for not making this data known to you, YOU would be just as criminal to keep it a secret. There will always be an unsuspecting, trusting fool whom the rabid dogs will tear to shreds, but it does NOT have to be this way.

IF every subscriber made this essay broadly known to his friends, acquaintances and family, and they passed it on to their friends, word of mouth could cause many of these market manipulators to pause. IF this effort were done strenuously by many,
then perhaps the financial markets could weed out the crooked manipulators and the promoters could bring us more legitimate plays.

The stock markets are a financing tool. The companies BORROW money from you, when you invest or speculate in their companies. They want their share price going higher so they can finance their deal with less dilution of their shares... if they are good guys. But, how would you feel about a friend or family member who kept borrowing money from you and never repaid it? That would be theft, plain and simple. So, a market manipulator is STEALING your money. Don't let him do it anymore. Insist that the company in which you invest be honest or straight... or find another company in which to
speculate. Your money talks in LOUDER volumes than any stock promotion scheme. ALWAYS refuse any deal which smells wrong.

Refuse to tolerate the scams prevalent in the financial markets. This can ONLY be accomplished by KNOWING and USING the above rules. Thoroughly COMPLETE your due diligence on a company before risking a dime. Dig up the Insider Reports to find out who is blowing out their paper, how often they are blowing out their paper and whatever happened to their "last play."

Begin to use this as YOUR rule of thumb: If the insider's paper is really worthless, then avoid it. Find another's whose paper DOES hold promise and honest possibilities. In these small cap stock markets, you are investing more in the INDIVIDUAL behind the play, than the "possibility" of the play itself. Ask yourself before speculating: Could I lend this person $5,000 for a year and hope to get it back? If not, then don't! Do it for your own good and the good of everyone else who is so foolish as to speculate in these financial markets!

The truly sane and only somewhat safe solution to all of this: FIND GOOD COMPANIES IN WHICH TO SPECULATE AND GET INTO THEM AT THE GROUND FLOOR LEVEL. Anything else is criminal or stupid. This is a case where there really isn't a gray area. It's either
Black or it's White. The company and its management are scamsters
or they really intend to bring value to their shareholders

Portfolio Transaction Week15-2009

2008-04-09T01:53:00.000-07:00

Tue (7/04)
Bought PAX P0.89/share
Wed (8/04)
Bought more PAX P0.91/092/share
Bought IP P1.32/1.34/share
Zero Cash... fund fully invested
All previous stock positions remains the same.

Portfolio Transaction Week14-2009

2008-04-05T01:00:00.000-07:00

Mon (30/03)
Boughtback more AGI P1.50/share
Bought AT P4.40/share
Wed (01/04)
Sold AT P4.10/share 'wrong timing :-(
Fri (03/04)
Bought more AGI P1.60/share

What is UNIT INVESTMENT TRUST FUND (UITF)

2008-03-28T01:31:00.000-07:00

What is UNIT INVESTMENT TRUST FUND (UITF)

The Trust Officers Association of the Philippines (TOAP) has prepared this primer to help clients understand the features of unit investment trust funds (UITFs). It highlights the benefits and risks of investing in UITFs, what to look for in a Declaration of Trust which sets the investment objectives and embodies the mechanics of the UITF. It also provides answers to frequently asked questions about UITFs, as well as other information that clients should consider before investing in these products.

A BIT OF HISTORY
The year 2005 saw the proliferation of new trust products in the market known as Unit Investment Trust Funds or UITFs, a product which trust licensed institutions can establish, launch and operate in accordance with Bangko Sentral ng Pilipinas (BSP) Circular 447 issued on September 3, 2004. UITFs are intended to replace a popular product of the past two decades known as Common Trust Funds (CTF) which the BSP had directed to be phased out by October 1, 2006 (and October 1, 2009 for the long term tax-exempt CTFs). As early as January 1, 2005, BSP directed trust entities not to accept funds from new investors under CTF products while additional investments from existing clients were no longer allowed effective April 1, 2005. These BSP regulations were intended to align the operation of pooled funds under management by trust entities with international best practices and to ensure differentiation from bank deposits and other direct liabilities of the financial institution.

To the investing public, many questions come to mind: Is the UITF a better product than the CTF? If so, in what way? How do investors benefit from this product? What are the risks?

FREQUENTLY ASKED QUESTIONS ON UNIT INVESTMENT TRUST FUNDS
1. What is a Unit Investment Trust Fund?
A Unit Investment Trust Fund (UITF) is an open-ended pooled trust fund denominated in pesos or any acceptable currency, which is operated and administered by a trust entity and made available by participation. Each UITF product is governed by a Declaration of Trust (or Plan Rules) which contains the investment objectives of the UITF as well as the mechanics for investing, operating and administering the fund.

Most UITFs are considered medium to long term investments. Clients considering to invest in UITFs must have the financial resources to stay invested in them for a reasonable period of time in order to maximize earnings potentials. If the funds to be invested will be needed by the client in the immediate future, the UITFs may not be a suitable investment vehicle for such client.

2. What does “open-ended pooled trust fund” mean?
An open-ended trust fund allows clients to invest or redeem their investments at any time subject to guidelines set forth in the UITF Declaration of Trust. Funds from various clients with similar investment objectives are pooled together into one fund, which the trustee invests in various types of securities with the aim of maximizing returns within reasonable risk levels.

3. What does “made available by participation” mean?
A client invests in a UITF by purchasing units of participation in the fund. The units of participation represent the investor’s proportionate beneficial share in the total value of the fund. As an investor in the fund, the client does not own any specific asset of the fund, only a proportionate share in all of the fund’s assets.

4. At what price may these units of participation be purchased?
Units of participation are made available to investors based on the Net Asset Value Per Unit (NAVPU) of the fund for the day. The NAVPU is derived by dividing the fund’s Net Asset Value (NAV) by the number of outstanding units in the fund. NAV, on the other hand, is the sum of the market value of the investments of the fund less expenses such as taxes, fees and other qualified charges. To determine how many units of participation a certain amount of investment is equivalent to, simply divide the amount to be invested by the prevailing NAVPU for the day.

5. How different is a UITF from a CTF?
The main difference between a UITF and a CTF is the manner in which the NAV is calculated. CTFs are valued using the accrual method (i.e. NAV of the fund takes into account principal and interest accruing from various investments of the fund). This method generally results in a steadily increasing NAVPU. UITFs, on the other hand, follow the marked-to-market valuation method, which calculates the NAV based on the estimated fair market value of the assets of the fund based on prices supplied by independent sources. The marked-to-market value takes into account the accrued interest (and dividends where the fund is invested in equities) plus unrealized gains or losses of the investments given their prevailing market prices. As such, UITF NAVPU may fluctuate depending on the volatility of the prices of various assets held by the fund.

6. Why was there a need to change the valuation methodology?
The marked-to-market valuation provides the investor with a more accurate and fair value of his investments at any given time. It ensures that no participant in the fund is put at a disadvantage as a consequence of new investors coming in or of existing investors getting out of the fund. The marked-to-market methodology is in accordance with international best practices.

7. What documents should a client have as evidence of his investment in a UITF?
The UITF investor and the trust entity shall execute a Participating Trust Agreement to confirm the investor’s desire to participate in the fund and the trust entity’s acceptance thereof, subject to the terms and conditions set forth in the Declaration of Trust. The trust entity shall likewise provide the investor with a Confirmation of Participation which documents the amount of funds received by the trust entity, the NAVPU on the date of purchase and the corresponding number of units of participation. These original documents are surrendered to the trust entity upon redemption.

8. Are all UITF products offered in the market the same?
No. UITF products differ in terms of the fund’s investment objectives, types of assets invested, portfolio mix, minimum investment amount, minimum holding period, possible benefits and risks, settlement period and charges. These key features should be explained by the trustee in detail to its investors to determine customer suitability. The level of risk to which an investor is exposed to may vary from one UITF to another. Generally, UITFs that aim to deliver higher potential returns are likely exposed to greater risks and need a longer investment time horizon to achieve their potential returns. Conversely, UITFs that aim to deliver lower returns are likely exposed to lower risks and require a shorter investment time horizon to achieve their investment goals.

Each UITF product is governed by a specific Declaration of Trust, which contains the product’s investment objectives and mechanics. This Declaration of Trust shall be made available by the trust entity to investors, upon request. Based on these information, the client should choose a UITF product suitable to his investment objectives and risk tolerance

9. What are the types of UITFs available in the market?
UITFs are established and managed based on a set of investment objectives and strategies, and these have varying levels of risks and returns. UITFs may be denominated in Philippine Pesos, US Dollars and acceptable third currencies. Following are the four general major classifications of UITFs listed according to ascending levels of risk, return and investment time horizon:

a. Money Market Funds - These funds are invested principally in short term, fixed income deposits and securities with a portfolio duration of one year or less.

b. Bond Funds – The mandate of these funds is to invest in a portfolio of bonds and other similar fixed income securities with portfolio duration which may exceed one year. These may further be classified into Intermediate Funds (where the fund mandate limits the duration up to 3 years), Medium Term Funds (where the fund mandate allows a duration of up to 5 years) and Long Term Funds (where the fund mandate allows a duration of greater than 5 years).

c. Balanced Funds – The mandate of these funds is to invest in a diversified portfolio of bonds and stocks where investments in stocks shall be up to a maximum of 40% to 60% of the fund, with the balance invested in fixed income securities.

d. Equity Funds – The mandate of these funds is to invest substantially in equities. Cash may be kept for liquidity and portfolio re-balancing purposes.

10. Can a client invest in more than one type of UITF?
Yes. Clients may diversify their investments across various UITFs as long as the objectives and mechanics of the funds are suitable to their requirements.

11. Which type of UITF is suitable to an investor?
When choosing a UITF, investors should identify their needs and goals and match them against the investment parameters of the product. To determine the clients’ suitability to a fund, the following factors have to be considered:
· Investment capacity - the amount available for investment
· Investment horizon -how long a client can stay in the fund
· Risk profile -how much risk the client is willing to take
· Investment objective -what the investors seeks to achieve by making the investment, e.g. whether client wants income or capital growth
The investor should likewise be comfortable with the trustee of the UITF in terms of their expertise and skills in fund management.

12. Who can invest in a UITF?
Any person, association, corporation, entity or firm who/which has the legal capacity to contract or establish a trust may invest in a UITF product.

13. Is there an indicative or guaranteed rate of return for UITF products?
Since UITFs are subject to the marked-to-market valuation method, the NAVPU may fluctuate depending on the volatility of the market. As such, indicative rates cannot be quoted by the trustee. Yields are variable and cannot be guaranteed. Historical performance of the fund may provide an indication of how well the trustee is managing the fund but this is not a guarantee of future performance.

14. How do investors keep track of the value of the UITF investment?
The NAVPU of the fund is generally made available on a daily basis (or as prescribed in the Declaration of Trust) at the office of the trustee, its branches or through the TOAP website or the trust entity’s website. To determine the value of the UITF investment, simply multiply the NAVPU by the number of units of participation acquired.

15. How much will an investor get when the UITF investment is redeemed?
The investor can calculate the proceeds of his UITF investment by simply multiplying the number of units being redeemed by the applicable NAVPU for the day. Generally, the NAVPU is already net of the trust fees, taxes and qualified charges. However, there may be additional charges to the client such as early withdrawal charges in cases where the client redeems his UITF investment prior to the completion of the minimum holding period required by the trustee.

16. How does a participant determine how much he earned from the UITF?
The difference between the value of the units of participation at the time of purchase and the value at the time the units are redeemed determines how much an investor earned (or the loss incurred) from the UITF investment. As the fund value increases, each participant earns more. Ideally, the longer a client stays invested in the fund, the better his chances of earning more since the underlying investment outlets become less prone to market volatility over time.

17. How does an investor determine the return on the UITF investment?
The client’s return on investment can be determined using the following formula:

Return on Investment = (Proceeds of investment – Initial investment)/Initial investment * 100

Where:
Proceeds of investment = Applicable NAVPU x number of units of participation (less early withdrawal charges, if any)
Initial investment = Amount invested

18. How can an investor compare the performance of various trust entities?
All trust entities offering UITF products are required to publish the fund’s prevailing NAVPU as well as the year-on-year and year-to-date return on investment (ROI) in major dailies at least once a week.

Year to Date (YTD) ROI = [NAVPU (current) – NAVPU (last year’s end figure)]/NAVPU (last year’s end figure) * 100

Year on Year (YOY) ROI = [NAVPU (current) – NAVPU (same date of previous year)]/ NAVPU (same date of previous year) * 100

The YTD ROI presents the absolute returns of the fund from the end of the previous year. The YTD ROI cannot be compared to rates offered by deposits, government securities or other money market products which are usually expressed on an annualized or per annum basis, unless the returns for a full year (i.e. January 1 to December 31) are being derived. The YOY ROI, on the other hand, compares the NAVPU as of current date against the NAVPU as of the same date in the previous year. This may be considered an annualized return as the period covered is always one full year. It should be noted however that historical returns of a fund are purely for reference purposes and do not guarantee similar future results.

19. When does the investor get the proceeds of the UITF investment?
Payment to the investor will depend on the settlement period prescribed by the trustee. This may vary depending on the nature and settlement convention of the investments of the UITF product.

20. In what instruments can a trustee invest the fund?
The character and kind of investments which may be made by the trustee depend on the investment parameters set forth in the UITF Declaration of Trust or Plan Rules. BSP regulations, however, prescribe that UITF fund investments shall be limited to: (a) Bank deposits (b) Securities issued by or guaranteed by the Philippine government or the BSP (c) Tradable securities issued by the government of a foreign country, any political subdivision of a foreign country or any supranational entity (d) Exchange listed securities (e) Marketable instruments that are traded in an organized exchange (f) Loans traded in an organized market and (g) Such other tradable investments as the BSP may allow.

21. How will the investor know where the fund is invested?
A list of prospective and outstanding investment outlets of the fund shall be made available to the clients as part of the disclosure requirements for UITFs. The list of investment outlets shall be updated quarterly.

22. How much do trustees charge UITF investors?
The trustee shall charge the fund for management fees, taxes and qualified expenses. The management fee shall differ for each type of fund and will cover the costs of investment research, management, marketing and routine administrative expenses of the trustee.

23. Can the UITF Declaration of Trust be changed and how will that affect
existing investors of the fund?
The Declaration of Trust of a UITF may be amended by a resolution of the Board of Directors of the trust entity provided that participants in the fund shall be immediately notified of such amendments. Clients who are not in conformity with the amendments shall be allowed to withdraw their participations within a reasonable time but in no case less that thirty calendar days after the amendments are approved.

The trustee shall submit the amendments to the BSP for approval, within ten business days from approval of its Board of Directors. Said amendments are deemed approved by the BSP after thirty (30) business days from date of completion of requirements.

24. What are the risks of investing in a UITF?
A client investing in a UITF product should be prepared to absorb the following potential risks: (a) interest rate risk – the potential for an investor to experience losses due to changes in interest rates; (b) market/price risk – the potential for an investor to experience losses due to changes in the market prices of securities (e.g. bonds and equities); (c) liquidity risk – the inability to sell or convert assets into cash quickly or where conversion to cash is possible but at a loss; and (d) credit risk – the risk of loss due to a borrower or issuer’s failure to repay principal and/or interest on securities issued.

Because the assets of the UITF are valued based on the prevailing market prices, yields and potential yields cannot be guaranteed. There is a possibility of incurring losses in the UITF if the client withdraws in a scenario of generally declining market prices, even if the fund is invested in government securities. It should be noted that investments in government securities, although considered credit risk free in the domestic market are also subject to interest rate risk, market risk and under extreme volatile conditions, to liquidity risk. Should this situation arise, clients may, however, opt to defer their withdrawals until market conditions become more favorable.

Being a trust product, there is no guaranty on the principal and income of the investments and losses, if any, shall be for the risk of the UITF investors. UITFs are governed by BSP regulations but are not deposit products, hence are not covered by the Philippine Deposit Insurance Corporation (PDIC). Historical performance of a fund may be used for reference purposes only and do not guarantee similar future results.

25. What are the benefits of investing in a UITF?
Investors in UITFs can avail of the following benefits:
· Diversification. By participating in a UITF, risks are spread out across the various investments held by the pooled trust fund. Diversification comes in the form of various types of investments, issuers and tenors. UITFs are required to observe its exposure in a single entity and its related parties to 15% of the market value of the fund, except in the case of government securities.
· Liquidity. While it is advisable to stay invested in the UITF for a longer period of time, clients can redeem units of participation at any time. The fund will not have difficulty redeeming such units of participation because UITF investments are limited to marketable or tradable securities.
· Affordability. UITFs generally have low minimum investment requirements. Additional investments may be made in tranches as funds become available to the client.
· Better earnings potential. Greater earnings potential is achieved without having to invest large sums of money. There are opportunities for potentially higher returns due to possible marked-to-market gains on top of accrued income from investments. UITFs provide access to financial instruments not readily available to retail investors.
· Exempt from reserve requirements. UITFs are not subject to reserve requirements imposed on bank deposits and CTFs.
· Professional fund management. Participating in a UITF allows clients to gain access to the expertise and services of seasoned fund managers who are able to actively monitor the markets for possible investment opportunities.
· Transparency. Trust entities are required to publish the UITF NAVPUs at least weekly, allowing investors to compare investment performance of various fund managers. Each UITF is subject to a separate annual audit by an independent auditor acceptable to the BSP, the results of which may be made available to investors. In addition, each UITF is required to have a BSP accredited third party custodian, who is tasked with safekeeping the securities of the UITF and performing independent marking-to-market of such securities.
· Regulated product. The management and administration of UITFs are governed by the BSP.

Portfolio Transaction Week13-2009

2008-03-27T10:47:00.000-07:00

Mon (23/03)
Bought more AGI P1.34/share
Tue (24/03)
Sold 20% of AC P223/share
Thu (26/03)
Sold 20% SMPH P7.50/share
Fri (27/03)
Sold 50% AGI P1.54/share
Sold 30% SMPH P7.50/share

Portfolio Transaction Week12-2009

2008-03-21T22:36:00.000-07:00

Mon (16/03)
Sold some JFC P42.50/share
Tue (17/03)
Bought more SMPH P7.00/share
Bought more AGI P1.28/share
Fri (20/03)
Sold 30% of AC P209/share
Other position remains the same.

Portfolio Transaction Week11-2009

2008-03-14T07:23:00.000-07:00

Thu (12/03)
Bought SMPH P7.10/share
Fri (13/03)
Sold some JFC P42.50/share
Other position remains the same.

Portfolio Transaction Week10-2009

2008-03-06T21:35:00.000-08:00

Tue (3/03)
Bought more SMPH P6.90/share
Wed (4/03)
Bought more AC @ P185/share
Thu (5/03)
Sold 40% SMPH P7.50 & P7.60/share
Bought AGI @ P1.42/share ,First re-entry after selling @P1.78 5months back.
Other position remains the same.

Portfolio Transaction Week09 - 2009

2008-02-28T00:54:00.000-08:00

Fri (27/02)
Bought more AC @ P191/share,
Bought more SMPH P7.20/share
Other position remains the same.

Portfolio Transaction Wk08-2009

2008-02-20T21:52:00.000-08:00

Tue (17/02)
Buy AC @ P198/share,
Thu (19/02)
Bought more URC P7.40/share
Other position remains the same.

Portfolio Transaction Week 7-2009

2008-02-14T01:23:00.000-08:00

Tue (10/02)
Buy more URC @ P7.20/share,
Other position remains the same.

Philippine Equity Mutual Funds Performance FY2008

2008-02-07T01:33:00.000-08:00

Source: Investment Company Association of the Philippines
except my personal Philippine Stock Portfolio NAV.

Portfolio Transaction Week06-2009

2008-02-06T23:25:00.000-08:00

Fri (6/02)
Sold all AC @ P208/share,
Other position remains the same.

Portfolio Transaction week05-2009

2008-01-30T21:33:00.000-08:00

Wed (28/01)
Sold all AC @ P205/share,
Bought more NRCP @P1.30/share
Thu (29/01)
Sold some SMPH @ P7.50/share
Sold some JFC @ P41/share
Fri: (30/01)
Bought back AC @ P194/share
Bought back JFC @ P39/share

Portfolio Transaction Week2-4, 2009

2008-01-23T23:41:00.000-08:00

Tue (08/01)
Bought URC @ P6.50/share
Wed: (16/01)
Bought more URC @ P6.40/share
Mon: (21/01)
Sold half AC @ P210/share
Bought more URC @ P6.90/share
Tue: (22/01)
Sold all DMC @ P2.60/share

Portfolio Transaction Week46 - 2008

2007-11-14T22:24:00.000-08:00

Mon (10/11)
Sold all NRCP @ P1.40/1.42 / share
Tue: (11/11)
Sold 50% AC @ P212/share
Thu: (13/11)
Boughtback AC @ P200/share
Fri: (14/11)
Bought 1k JFC P39.00/share
Withdrawn 45% cash on account
Cash at 1%

Portfolio Transaction Week45 - 2008

2007-11-01T06:33:00.000-07:00

Mon: (03/11)
Sold 60k NRCP @ P1.46/share
Wed: (05/11)
Bought 10k SMPH @ P7.80
Thu: (6/11)
Bought 1k JFC P40.00/share
Sold 1k JFC P42.00/share
Fri: (7/11)
Bought 2k JFC P40.00/share
Cash at 28%

Portfolio Transaction Week44 - 2008

2007-10-31T22:27:00.000-07:00

Thu: (30/10)
Sold half JFC P45.00/share
Fri: (31/10)
Sold half SMPH P8.40 & P8.50/share
Cash at 31%

Portfolio Transaction Week43 - 2008

2007-10-26T00:21:00.000-07:00

Thu: (23/10)
Sold all AGI P2.00/share
Sold some LC P0.0875/share
Cash at 13%

Portfolio Transaction Week42 - 2008

2007-10-19T03:08:00.000-07:00

Mon: (13/10)
Add some AC P238.0/share
Add some SMPH @P7.50/share
Tue: (14/10)
Bought more AC @P252.50/share
Sold AT @ P9.40/share
Sold some LC @P0.125/share
Wed: (15/10)
Sold URC @P6.70/share
Sold more LC @P0.12/share
Thu: (16/10)
Bought more AC P245/share
Bought more JFC @P41/share
Fri: (17/10)
Bought AGI @P2.18/share
Bought more SMPH@P7.40/share
Cash at 4.5%

Portfolio Transaction Week 41 - 2008

2007-10-13T11:25:00.000-07:00

Wed: (8/10)
Sold some ALI P8.0/share
Bought JFC @P40.00/share
Fri: (10/10)
Bought more AC @P230/share
Bought URC @P6.60/share
Bought more NRCP @P1.62/1.64/share
Bought JFC @P38.50/share
Cash at 19%

Portfolio transaction week 40 - 2008

2007-10-04T00:09:00.000-07:00

Portfolio transaction for the week 40:
Mon: (29/9)
Bought more ALI @P9.20/share
Bought more SMPH @P8.40/share
Thu: (2/10)
Sold all PX @P7.0/share
Sold all DMC @P3.85/share
Fri: (3/10)
Bought more NRCP @P1.90/share
Cash at 35%

Portofolio Transaction - Week 39

2007-09-26T23:54:00.000-07:00

Portfolio transaction for the week 39:
Mon: (22/9)
Bought ALI @ P9.80/share
Cash at 38%

Portofolio Transaction - Week 38

2007-09-19T07:53:00.000-07:00

Portfolio transaction for the week 38:
Fri: (19/9)
Bought AT @ P10.75/share
Bought more LC @ P0.18/share
Bought more NRCP @P1.96/share
Cash at 50% waiting for placements outside the stock market.

Portfolio Transaction week 36 - 2008

2007-09-05T22:54:00.000-07:00

Portfolio transaction for the week 36:
Sold IP @ P3/share
Fri: Bought some LC @ P0.225/share
Cash at 56% waiting for placements outside the stock market.

Portfolio Transaction Weeks 31 & 32 - 2008

2007-08-08T22:16:00.000-07:00

Portfolio transaction for the week 31 & 32:
Sold some SMPH @ P7.6/share
Sold some LC @ P0.25 & P0.26 / share
Sold some AT @ P13.25/share
Thu: Sold some PX @ P7/share
Fri: Bought more DMC @ P5.10/share
Market shows it unpredictability last Friday even with 200pts drop in DJIA,is this mini-bull has strong legs? I guess this run relates to the drops in oil prices and coming 2q08 reporting season. My guess, the upswing to continue...
Cash: 27.5% - Have to put this cash to work.

Corporate Disclosures July 2008 - pdf

2007-07-11T02:15:00.000-07:00

Waterfront Philippines, Incorporated (WPI) Additional information re: lease, development, operation and management of former Mimosa Leisure Estate

LOTO - Board approval of share buy-back program; cash dividends declaration; authorization from the PCSO to sell additional Scratch-It Tickets

"SM Investments Successfully Launched and Priced US$350M Dollar Bonds"

"Megaworld set to launch The Venice in Mc Kinley Hill Fort Bonifacio Taguig"

Execution of MOU with CMC Telecommunications Services Corp.; Press Release: "IPVG Forms Strategic Partnership with CMC Telecom"

Execution of MOU with Gemma Communications LP; Press Release: "IPVG and GemmaCom Enters Partnership"

"PNB allots P6B for China expansion"

"GMA Network sees better first half net income with P879M profit in 5 months"

"Atlas unit to boost copper volume; Toledo mine rehab nearly finished"

"KHI to start pre-selling of Raffles Residences"

"Cityland Reaffirms Position as Leading Condominium Developer"

"ALI mulls P3-B mixed-use project in Baguio"

AGI - plan to build all-suites hotel in Newport City

"Globe eyeing broadcast firm?"

"Ayala Land bares P3-b John Hay project"

"Manila Water bags a Project in Vietnam"

Additional information on acquisition by subsidiary of equity stake in Forum Energy Plc

Philex Mining Corporation (PX) Clarifying press release by subsidiary

Philex Mining Corporation (PX) Summary of shipment as of July 2, 2008

Philex Mining Corporation (PX) Summary of production for June 2008

Acquisition by subsidiary of 13.94% of Forum Energy Plc

Press Release: "SMC, Kuok Group to launch US$1-B food security project"

Clarification of news article: "PLDT denies Salim group selling to Li"

"Completion of financial restructuring by PRC, LLC"

"Robinsons launches new project - Two Gateway Place in Robinson's Cybergate City (Pioneer, Ortigas)"

"Manila Water announces 1st half profits"

"MPIC to Operate Cardinal Santos Medical Center"

"Petron Reports 14% Drop in Net Income for First Half of 2008"; Financial Statements

OPM - Sale of Interest in Cadlao Oil Field

AT - Details of proceeds of US$20 million bridge loan facility

JFC - Acquisition of Chow Fun Holdings, LLC by wholly-owned subsidiary

GEO - Board approval of agreements with several mining companies

Quarterly Financial Reports 1Q07 - pdf

2007-06-29T02:13:00.000-07:00

Abacus Consolidated Resources and Holdings, Inc(ABA)

ABS-CBN Broadcasting Corporation(ABS)

Ayala Corporation(AC)

Aboitiz Equity Ventures, Inc(AEV)

Alliance Global Group, Inc.(AGI)

AJO.net Holdings, Inc.(AJO)

Ayala Land, Inc.(ALI)

A. Soriano Corporation(ANS)

Aboitiz Power Corporation(AP)

APC Group, Inc.(APC)

Anglo Philippine Holdings Corporation(APO)

Apex Mining Co., Inc.(APX)

Abra Mining and Industrial Corporation(AR)

Atlas Consolidated Mining and Development Corporation(AT)

Asian Terminals, Inc.(ATI)

ATN Holdings, Inc.(ATN)

Benguet Corporation(BC)

Banco de Oro Unibank, Inc.(BDO)

Belle Corporation(BEL)

Boulevard Holdings, Inc.(BHI)

Benpres Holdings Corporation(BPC)

Bank of the Philippine Islands(BPI)

A Brown Company, Inc.(BRN)

Crown Equities, Inc.(CEI)

Cebu Holdings, Incorporated(CHI)

China Banking Corporation(CHIB)

Southeast Asia Cement Holdings, Inc.(CMT)

Chemrez Technologies, Inc.(COAT)

Citiseconline.com, Inc.(COL)

Cyber Bay Corporation(CYBR)

Diversified Financial Network, Inc.(DFNN)

Digital Telecommunications Phils., Inc.(DGTL)

DMCI Holdings, Inc.(DMC)

PNOC Energy Development Corporation(EDC)

EEI Corporation(EEI)

Empire East Land Holdings, Inc.(ELI)

eTelecare Global Solutions, Inc(ETEL)

Eton Properties Philippines, Inc.(ETON)

Ever-Gotesco Resources and Holdings, Inc.(EVER)

Filinvest Development Corporation(FDC)

First Gen Corporation(FGEN)

Filinvest Land, Inc.(FLI)

First Philippine Holdings Corporation(FPH)

GEOGRACE Resources Philippines, Inc(GEO)

Globe Telecom, Inc.(GLO)

Holcim Philippines, Inc.(HLCM)

International Container Terminal Services, Inc.(ICT)

Ionics, Inc.(ION)

IPVG Corporation(IP)

Jollibee Foods Corporation(JFC)

JG Summit Holdings, Inc.(JGS)

Keppel Philippines Marine, Inc.(KPM)

Lepanto Consolidated Mining Company(LC)

Fil-Estate Land, Inc.(LND)

Leisure & Resorts World Corporation(LR)

Manila Mining Corporation(MA)

MacroAsia Corporation(MAC)

Metropolitan Bank & Trust Company(MBT)

Megaworld Corporation(MEG)

Manila Electric Company(MER)

Minerales Industrias Corporation(MIC)

MRC Allied Industries, Inc.(MRC)

Manila Water Company, Inc.(MWC)

NiHao Mineral Resources International, Inc.(NI)

National Reinsurance Corporation of the Philippines(NRCP)

Omico Corporation(OM)

Oriental Petroleum and Minerals Corporation(OPM)

The Philodrill Corporation(OV)

Paxys, Inc.(PAX)

Petron Corporation(PCOR)

PICOP Resources, Inc.(PCP)

PetroEnergy Resources Corporation(PERC)

Pilipino Telephone Corporation(PLTL)

Philippine National Bank(PNB)

The Philippine Stock Exchange, Inc.(PSE)

Philex Mining Corporation(PX)

Rizal Commercial Banking Corporation(RCB)

Robinsons Land Corporation(RLC)

Philippine Realty and Holdings Corporation(RLT)

Semirara Mining Corporation(SCC)

Security Bank Corporation(SECB)

Solid Group, Inc.(SGI)

Shang Properties, Inc.(SHNG)

Sinophil Corporation(SINO)

Sta. Lucia Land, Inc.(SLI)

SM Investments Corporation(SM)

San Miguel Corporation(SMC)

SM Development Corporation(SMDC)

SM Prime Holdings, Inc.(SMPH)

TKC Steel Corporation(T)

Trans-Asia Oil and Energy Development Corporation(TA)

Philippine Long Distance Telephone Company(TEL)

Alliance Tuna International, Inc.(TUNA)

Union Bank of the Philippines, Inc.(UBP)

United Paragon Mining Corporation(UPM)

Universal Robina Corporation(URC)

Uniwide Holdings, Inc.(UW)

Vantage Equities, Inc.(V)

Vista Land & Lifescapes, Inc.(VLL)

Vulcan Industrial & Mining Corporation(VUL)

Annual Financial Reports FY2007 - pdf

2007-06-29T01:15:00.000-07:00

Abacus Consolidated Resources and Holdings, Inc(ABA)

ABS-CBN Broadcasting Corporation(ABS)

Ayala Corporation(AC)

Aboitiz Equity Ventures, Inc(AEV)

Alliance Global Group, Inc.(AGI)

AJO.net Holdings, Inc.(AJO)

Ayala Land, Inc.(ALI)

A. Soriano Corporation(ANS)

Aboitiz Power Corporation(AP)

APC Group, Inc.(APC)

Anglo Philippine Holdings Corporation(APO)

Apex Mining Co., Inc.(APX)

Abra Mining and Industrial Corporation(AR)

Atlas Consolidated Mining and Development Corporation(AT)

Asian Terminals, Inc.(ATI)

ATN Holdings, Inc.(ATN)

Benguet Corporation(BC)

Banco de Oro Unibank, Inc.(BDO)

Belle Corporation(BEL)

Boulevard Holdings, Inc.(BHI)

Benpres Holdings Corporation(BPC)

Bank of the Philippine Islands(BPI)

A Brown Company, Inc.(BRN)

Crown Equities, Inc.(CEI)

Cebu Holdings, Incorporated(CHI)

China Banking Corporation(CHIB)

Southeast Asia Cement Holdings, Inc.(CMT)

Chemrez Technologies, Inc.(COAT)

Citiseconline.com, Inc.(COL)

Cyber Bay Corporation(CYBR)

Diversified Financial Network, Inc.(DFNN)

Digital Telecommunications Phils., Inc.(DGTL)

DMCI Holdings, Inc.(DMC)

PNOC Energy Development Corporation(EDC)

EEI Corporation(EEI)

Empire East Land Holdings, Inc.(ELI)

eTelecare Global Solutions, Inc(ETEL)

Eton Properties Philippines, Inc.(ETON)

Ever-Gotesco Resources and Holdings, Inc.(EVER)

Filinvest Development Corporation(FDC)

First Gen Corporation(FGEN)

Filinvest Land, Inc.(FLI)

First Philippine Holdings Corporation(FPH)

GEOGRACE Resources Philippines, Inc(GEO)

Globe Telecom, Inc.(GLO)

Holcim Philippines, Inc.(HLCM)

International Container Terminal Services, Inc.(ICT)

Ionics, Inc.(ION)

IPVG Corporation(IP)

Jollibee Foods Corporation(JFC)

JG Summit Holdings, Inc.(JGS)

Keppel Philippines Marine, Inc.(KPM)

Lepanto Consolidated Mining Company(LC)

Fil-Estate Land, Inc.(LND)

Leisure & Resorts World Corporation(LR)

Manila Mining Corporation(MA)

MacroAsia Corporation(MAC)

Metropolitan Bank & Trust Company(MBT)

Megaworld Corporation(MEG)

Manila Electric Company(MER)

Minerales Industrias Corporation(MIC)

MRC Allied Industries, Inc.(MRC)

Manila Water Company, Inc.(MWC)

NiHao Mineral Resources International, Inc.(NI)

National Reinsurance Corporation of the Philippines(NRCP)

Omico Corporation(OM)

Oriental Petroleum and Minerals Corporation(OPM)

The Philodrill Corporation(OV)

Paxys, Inc.(PAX)

Petron Corporation(PCOR)

PICOP Resources, Inc.(PCP)

PetroEnergy Resources Corporation(PERC)

Pilipino Telephone Corporation(PLTL)

Philippine National Bank(PNB)

The Philippine Stock Exchange, Inc.(PSE)

Philex Mining Corporation(PX)

Rizal Commercial Banking Corporation(RCB)

Robinsons Land Corporation(RLC)

Philippine Realty and Holdings Corporation(RLT)

Semirara Mining Corporation(SCC)

Security Bank Corporation(SECB)

Solid Group, Inc.(SGI)

Shang Properties, Inc.(SHNG)

Sinophil Corporation(SINO)

Sta. Lucia Land, Inc.(SLI)

SM Investments Corporation(SM)

San Miguel Corporation(SMC)

SM Development Corporation(SMDC)

SM Prime Holdings, Inc.(SMPH)

TKC Steel Corporation(T)

Trans-Asia Oil and Energy Development Corporation(TA)

Philippine Long Distance Telephone Company(TEL)

Alliance Tuna International, Inc.(TUNA)

Union Bank of the Philippines, Inc.(UBP)

United Paragon Mining Corporation(UPM)

Universal Robina Corporation(URC)

Uniwide Holdings, Inc.(UW)

Vantage Equities, Inc.(V)

Vista Land & Lifescapes, Inc.(VLL)

Vulcan Industrial & Mining Corporation(VUL)

Corporate Disclosures June 2008 - pdf

2007-06-28T11:57:00.000-07:00

"Ayala Sells 3.8 Million Shares in Globe Telecom"

"Philex unit set to produce high-grade coal in Zamboang Sibugay"

Philex set to acquire mining firm this year

IP subsidiary licensing agreement with Perfect World Co., Ltd.

"SM - Pico de Loro Beach & Country Club Launching"

"NRCP looking for partner"

"Megaworld defers jv plan with Fil-Estate"

"Belle expects P1.5B in revenues"

"SM Prime completes fund raising through debt notes"

"MEG - launch of new residential projects for 2008"

"SM Dev. to build condo at Mall of Asia complex"

"Globe eyes multibillion-peso revenues from new project"

"Metrobank remittance business shows strong growth"

"PX - Summary of shipment as of June 17, 2008"

"SM Prime Holdings, Inc. Successfully Completes Php 3B Fixed Rate Notes Facility"

"Chemrez eyes overseas oleochemicals market"

"iRemit reports a 49% growth in remittance volume outpacing the industry trend"

"Vista Land sees higher revenues"

"DMC subs DMCI Power Corp SEC approval of increase in authorized capital stock of subsidiary"

"Tender Offer Report filed by SEA Refinery Holdings B.V. re: offer to acquire remaining 60% of PCOR shares"

"CHI Report by Owner of More Than Five Percent"

"Chemrez Technologies Announces Cash Dividends; May Sales Performance"

"ORE Further clarification on mining claims in Narra, Palawan"

What exactly is a hedge fund?

2007-06-22T09:37:00.000-07:00

Like mutual funds, hedge funds pool investors’ money. The aim of most hedge funds is capital preservation, positive and consistent annual returns, and limited swings in value. But unlike mutual funds, which are generally happy to beat the returns of an average benchmark, like the S&P 500 index, most hedge funds are interested in absolute returns – maximizing the increase in value each and every year.
The funds seek to maximize their goal by managing their risk, mostly by hedging. Hedging is a strategy used to protect a portfolio against sharp movements in market values, often accomplished by buying and holding assets that have good long-term prospects while simultaneously selling short assets that have doubtful prospects. In the case of investments, risk comes in a variety of forms: Market, interest rate, inflation, large weightings in a sector, region, single company, or currency.
While hedge funds initially got their name as a result of their hedging investment strategy, many hedge funds today use strategies that do not include any hedging, including funds that are either completely long-funds or completely short-funds, or even sector funds. Just because a fund is a hedge fund does not necessarily mean there is any hedging of investments.
Unlike most mutual funds, hedge funds employ a variety of aggressive tools to achieve their goals, including selling short, buying or selling options, futures, commodity and/or currency futures, investing in derivatives, leverage, arbitrage, and holding highly-concentrated positions.
Before we go any further, let me just define and demystify a few of the above terms that often confuse investors:
Selling short: Say an investor thinks the shares of the XYZ Widget Co. are overpriced at $10. He borrows 100 shares, for a total loan of $1,000 (we won’t take into account commissions for this simple example) . He then sells them, pocketing $1,000. Now, a week or so later, the shares fall to $8. The investor buys them back at a cost of $800, gives back the 100 shares he borrowed to the brokerage firm, and takes his profit of $200 ($1,000 - $800) to the bank. As you can see, short-selling is not as complicated as it sounds and is a very frequently-used tool.
Arbitrage: The attempt to profit from the fact that sometimes an asset trades at a different price in different markets at the same time. An investor may log onto his computer prior to the U.S. stock market’s opening and find that shares of XYZ stock closed in the U.S. the day before at $18.63, yet they opened on the Japanese Nikkei exchange at $18.64, creating an arbitrage opportunity. The investor would then sell the higher priced asset in the Japanese market (sells it short) and buy the lower priced asset in the U.S. market (buys it long) . When the prices converge, he will profit by selling the formerly low-priced asset in the U.S. and buying back the formerly high priced asset in Japan. You may think that a penny difference isn’t worth all that work, but when you are talking about hundreds of thousands of shares or contracts sometimes changing hands, those pennies add up!
Leverage: Borrowing in order to increase investment returns. Investors do this all the time by buying on margin – borrowing money from their brokerage firms to purchase investments that they hope will increase in value, thereby allowing them to sell the shares at the higher value, repay the loan and interest at the brokerage firm, and profiting from the difference. Hedge funds do the same thing, just with higher dollar amounts.
Similar to the returns of investments such as real estate and private equity placements, which are often deemed to be uncorrelated with those of traditional investments, hedge funds typically endeavor to achieve absolute returns not by market timing, or predicting the direction of prices. Instead they attempt to identify as many transient profit opportunities as possible that are immune to market gyrations, often resulting in greater risk-adjusted returns than the market.
Because hedge fund managers find opportunities, like the arbitrage example above, that generally involve small trading margins, they use leverage and prudent risk management to achieve their goal of good returns with less volatility. It is this potential that has attracted a growing number of individual and institutional investors who are seeking diversification and higher returns at a lower risk, to hedge fund investments.
And because the lion’s share of most hedge fund managers’ compensation is based on the percentage increase in their investors’ portfolios – not on how well they performed relative to an average benchmark – they have a strong incentive to maximize that performance. Additionally, many funds have a ‘high water mark’, whereby capital losses are required to be made up before a performance fee is paid, a further inducement toward capital preservation.
Consequently, while the media often portrays hedge funds as highly risky, due to the sophisticated tools they use to hedge their bets, the opposite is quite often the case – less risk, with higher returns.

OFW Hedging Instruments For Peso-USD rates by DBP

2007-06-15T00:13:00.000-07:00

For the longest time, there was no organized way for each OFW to work out a hedge for the value of his remittance. The Development Bank of the Philippines (DBP)
The first is a basic insurance policy with a “put” feature twist. Essentially, the OFW makes up his mind what exchange rate he wants to target, then buys an insurance contract from DBP for a minimum insured amount of $1,000 where the insurance fee increases with the amount insured. The fees will be determined according to market conditions. The insurance contract then is a guarantee that once the insurance matures, the OFW can exchange his dollars at the agreed rate.

There is another upside to this contract. If the insured exchange rate is P39 per dollar and the peso further appreciates to P35 per dollar, the OFW is fully protected because the insured rate of P39 prevails. If, however, the peso reverses to P45 per dollar, the OFW has the option to remit through DBP at the prevailing market exchange rate instead of the insurance rate of P39.

This gives someone peace of mind because he does not have to act on his dollar deposits by speculating on the future rate of the pesos versus the dollar. More importantly, the peace of mind means that his beneficiaries can plan their spending ahead of time using the exchange rate that himself chose as his “protection rate”.

Another hedge is a forward contract. With outright forwards, the future conversion rate of dollars to pesos is set in advance. However, you can no longer chooses this future rate directly and instead is set according to prevailing market parameters (presumably using something like an implied forward rate calculation). At maturity of the forward contract, the exchange of foreign currency into pesos is made at the forward rate, regardless of the prevailing market rate. Like the insurance hedge, this gives a peace of mind because the beneficiaries future purchasing power can be planned ahead of time.
These two hedging products should be useful. Without them, OFWs are either forced to remit more, OFW beneficiaries are asked to cut back on expenses or some combination of these two extremes.
Also qouted below is further info about the said DBP program.

New DBP Program Shields OFWs Against Strengthening Peso
December 17, 2007
Overseas Filipino workers (OFWs) and their families can now benefit from a new program being offered by DBP that seeks to help cushion their remittances against the continued appreciation of the peso.

President & CEO Reynaldo G. David announced that the DBP OFW Hedging Program is being made available through authorized manning companies or OFW associations. OFWs may hedge their remittances through two products, namely: the FX insurance and outright forwards. All transactions under the program, he added, must be in US dollar or Philippine peso, thus remittances in other currencies must be in equivalent US dollar amount.

“Through the FX insurance, OFWs may opt to sell their US dollars against the peso to DBP at a specified price on a specified date, thus offering them the opportunity to gain from peso depreciation. It also shields their remittances against a strengthening peso based on an agreed protection rate to be determined by the client,” President David explained.

Minimum amount that may be hedged through the FX insurance is $10,000 at a maximum term of three months. The insurance fee shall be dependent on market rates, the movement of the US dollar/Philippine peso, and the agreed protection rate.

The outright forwards, meanwhile, is a foreign exchange contract where the OFW may sell his US dollars and buy Philippine pesos at a pre-agreed rate for delivery on a future date. “OFWs availing themselves of this product will not have to pay any fees, plus they get the major benefit of security against foreign exchange fluctuations,” President David added.

OFWs may opt to hedge a minimum amount of $10,000 under the outright forwards at a maximum term of six months. The forward rate shall be determined by DBP. Manning companies or OFW associations participating in the program must place a holdout deposit with a minimum maintaining balance of $1000 with DBP depending on contract amount, or establish a credit line subject to Bank approval.

The following documents must also be submitted: authorization of manning company/OFW association to engage in the DBP OFW Hedging Program, employment contract or schedule of salaries from manning or principal institutions, and other documents as required under the DBP guidelines.

For more details on the DBP OFW Hedging Program, interested parties may contact the DBP Remittance Center or Treasury Department at telephone numbers 8921232 (direct line) or 818-9511 locals 2224 and 3219.

Understanding Financial Reports Easier than you Think

2007-06-07T02:10:00.000-07:00

Three most important financial statements that you need to understand.
The Income Statement is also called the profit and loss statement and it depicts the results of operations over a period of 12 months. Results of the two years prior are included for comparative purposes.

Here are the major accounts found on the Income Statement:
• Net Sales includes revenues net of returns, breakage allowances, freight-out and discounts.
• Cost of Goods Sold reflects the cost of buying raw materials and producing finished goods.
• Depreciation is a noncash expense, an amortization of fixed assets, to allocate their cost over their depreciable life.
• Selling, General and Administrative Expenses are all expenses associated with the normal operations of the business that were not included in cost of goods sold. Ex. salaries, rent, utilities, and advertising.
• Net Operating Profit is what is left over after deducting cost of goods sold, depreciation and SG&A expenses from net sales; tells you the company's profit on an operating basis without taking into account any unusual items of income or expense or interest and taxes.
• Other Income or Expenses are any unusual income or expense items such as gains or losses from investments or the sale of fixed assets. Interest expense is sometimes included in this category.
• Earnings Before Income Taxes nets out all pretax income and expense items.
• Provision for Income Taxes is the company's tax liability for the period in question.
• Net Income equals the bottom line - how much the company has earned - after netting out all expenses except for dividends.
In order to understand if the relationship between a company's income and expenses is healthy, it is beneficial to calculate each account as a percentage of sales, and then determine if the account has increased or decreased relative to sales over a period of time.

Try to decipher the reasons for the change; is the growth or reduction acceptable to you? Be on the lookout for significant growth or decreases in particular accounts, especially expense accounts such as interest. Can the company easily cover its interest expenses?

Also, if companies are in the biotech or computer technology industries, growth or reductions in R&D can be a telling sign of the company's future intent.

Determine if income is growing because of increased sales, lowered expenses (including taxes), or both.

The Balance Sheet, also called statement of condition or statement of financial position, shows the status of the company's assets (what they own), liabilities (what they owe), and owners' equity (how much they have left over) on a given date, usually the close of a quarter or a year. It is a snapshot, not a motion picture, and must be analyzed in comparison with prior period statements as well as operating statements.

The fundamental equation of the balance sheet is: Assets = Liabilities + Stockholder’s Equity - in other words, it balances!

The major accounts found on the Balance Sheet are as follows:

• Current Assets include cash, accounts receivable, inventory and other assets that are likely to be converted into cash, sold, exchanged or expensed in the normal course of business - usually within a year. These items may also include marketable securities, prepaid expenses, coins, or short-term investments like Treasury bills, and negotiable Certificates of Deposit.
• Net Fixed Assets consist of property, plant and equipment - relatively permanent assets that are used in the production of income, listed net of depreciation.
• Other Assets are miscellaneous assets that may include minority stock ownership in other companies, unconsolidated subsidiaries, intangibles such as goodwill, research and development costs, patents, trademarks, etc.
• Current Liabilities include accounts payable, notes payable, accrued liabilities, current portion of long-term debt, dividends payable - any debt or other obligations coming due within a year.
• Long-term Liabilities consist of debt obligations due after one year, including term loans, mortgages, debentures (unsecured bonds), capital lease obligations, pension liabilities and estimated liabilities under long-term warranties.
• Shareholders' Equity is ownership interest - the value of assets after all creditors have been paid. Includes preferred stock, common stock, capital surplus and retained earnings.

To analyze the Balance Sheet, look for significant growth or reduction in particular assets and liabilities, as well as overall growth or decrease in company size. You will want to review the changes in inventories, accounts receivables and payables, which will give you a good sense of the company's efficiency. Run a keen eye over the firm's debt levels. Is short-term debt growing too quickly and staying in place too long? Do goodwill and intangibles look reasonable?

The Statement of Consolidated Cash Flows has one primary purpose - to show you where the company received cash and how it spent it. It focuses on liquidity rather than just on increased cash, displaying operating results on a cash basis. The Financial Accounting Standards Board (FASB) requires analysis in three separate categories: cash flows from operating activities, investing activities, and from financing activities.

Uses and sources of cash are indicated as either increases or decreases in each account:

Uses:
Assets - positive (increase)
Liabilities - negative (decrease)

Sources:
Assets - negative (decrease)
Liabilities - positive (increase)

The most important line is Cash Flow from Operations. This is the cash that a company takes in from its day-to-day business. If it sells washing machines, the cash is from merchandise sales. Is this number positive; is it trending positive, from year-to-year? It's great if a firm is raking in money from its investments or even in real estate (although that's a lot harder to come by these days!), but the majority of its cash should be derived from the business in which it is in business to do.

Simply stated, a company's financial statements are akin to looking at a diagnostic printout of your automobile - they are a pretty complete picture of not only what the company looks like right now, but also what you can expect in the future in terms of management strategy and performance. Combined with news and statistics on industry, company, economic and market events, these statements will provide you the tools you need to analyze any company.

And once you get your feet wet with a report or two, the going gets much easier. Just look at the book filled with information key to your success as an investor, and it won't be long before you are rubbing your hands together, anticipating the edge that information will give you.

Happy Investing!

Philippine Stock Investing FAQ

2007-06-06T23:54:00.000-07:00

WHAT ARE STOCKS? SECURITIES?
Stocks are shares of ownership in a corporation. When you become a stockholder or shareholder of a company, you become part-owner of that company. Securities, on the other hand, are proof of one's ownership or indebtedness in a company. Examples of securities are treasury bills and commercial papers, which are considered as short-term and are traded in the money market; and stocks and bonds, which are long-term and traded in the capital market. Securities are easily bought and sold in the stock market.

WHAT ARE THE TYPES OF SECURITIES THAT I CAN BUY IN THE STOCK MARKET?
Most of the issues listed in the PSE are common stocks. Other types of securities such as preferred stocks, warrants, PDRs.
1. Common Stocks - These are usually purchased for participation in the profits and control of ownership and management of the company. Holders of common stocks have voting rights. They are also entitled to an equal pro rata division of profits without preference or advantage over another stockholder. However, they have the last claim on dividends and are the last to collect in case of corporate liquidation.
2. Preferred Stocks - Its name is derived from preference given to the holders of these stocks over holders of common stocks. Holders of preferred stocks are entitled to receive dividends, to the extent agreed upon, before any dividends are paid to the holders of common stocks. However, preferred stocks usually have a specified limited rate of return or dividend and a specified limited redemption and liquidation price.
3. Warrants - A corporation can also raise additional capital by issuing warrants. A warrant, normally issued on a detachable basis, allows its holders the right, but not the obligation, to subscribe to new shares at a set price during a specified period of time. It is usually provided free of charge and traded separately in the securities market.
4. Philippine Deposit Receipts (PDRs) - A PDR is a security which grants the holder the right to the delivery or sale of the underlying share, and to certain other rights including additional PDR or adjustments to the terms or upon the occurrence of certain events in respect of rights issues, capital reorganizations, offers and analogous events or the distribution of cash in the event of a cash dividend on the shares. PDRs are evidences or statements nor certificates of ownership of a foreign/foreign-based corporation. For as long as the PDRs arenot exercised, the shares underlying the PDRs are and will continue to be registered in the name of and owned by and all rights pertaining to the shares shall be exercised by the issuer.

WHERE CAN I BUY OR SELL SHARES OF STOCKS?
In the Philippines, the only operating stock exchange is the Philippine Stock Exchange (PSE). Its main function is to facilitate the buying and selling of stocks and other securities through its accredited trading participants.
The PSE has two trading floors - PSE Centre in Ortigas, Pasig City and PSE Plaza in Ayala, Makati City - where trading participants trade daily - from 9:30 a.m. to 12:10 p.m. except Saturdays, Sundays, legal holidays and days when the Central Bank Clearing Office is closed.

HOW ARE SHARES AND SDT-BONDS BOUGHT OR SOLD?
If you wish to buy shares of stocks, you must have a stockbroker who will do this for you. A stockbroker is a person or a corporation authorized and licensed by the Securities and Exchange Commission (SEC) and PSE to trade securities.
Investing Procedures:
1. Choose a stockbroker. The PSE has a complete list and information about all its trading participants who are authorized and qualified to trade either equity or debt securities for you. This list is also available on the Exchange's website and the PLDT directory's Government and Business listings yellow pages under the category of stock and bond brokers.
2. You shall be required to open an account and fill-out a Reference Card and to submit identification papers for verification. The stockbroker will then assign a trader or agent to assist you in either buying or selling any listed security. Discuss with the trader what stocks to buy or sell.
3. Give the order to your broker/trader, and then get the acknowledgement receipt.
4. For equity transactions: Deliver the Stock Certificate if you are selling or pay within the settlement date (3 days from date of transaction) if you are buying. Some brokers may require you to pay with post-dated checks upon ordering.
5. You shall receive from your broker either the proceeds of sale your stocks (after 3 days for equitie) or proof of ownership of stocks you bought (confirmation receipt and invoice). If you wish to have a physical certificate of the equities you bought, just give instructions to your broker and pay the required upliftment fee.

You can purchase shares of stock either through IPO (Initial Public Offering) or through the open market. Shares sold through IPOs are offered for the first time to the public by the company (primary market) whereby proceeds of the sale go directly to the company. Shares of listed or publicly traded companies are bought during trading (open market). These shares have since been transferred from one owner to another (secondary market) and proceeds of the sales do not go directly to the company but to the owners of the shares.

The Trading Cycle
All equity transactions, whether buying or selling has a settlement period of T+3 (trading day + 3 working days). This means that a seller should be able to deliver the stock certificate, if any, to his broker and the buyer must have paid the cost of transaction to his broker within 3 working days after the trade was done. Historically, settlement was done manually (27-day cycle). With the advent of scripless trading wherein settlement is done via the book-entry-system (thru Philippine Central Depository or PCD), transactions are settled on the third day after trade date. Under this system, the investor has the option to hold on to his certificate (uplift) or deposit (lodge) this certificate in PCD through his broker-participant account.

WHAT IS THE MINIMUM AMOUNT NEEDED TO INVEST IN THE STOCK MARKET?
Equity trading is done by board lot or round lot system. The Board Lot Table determines the minimum number of shares one can purchase or sell at a specific price range. Therefore, the minimum amount needed to invest in the stock market varies and will depend on the market price of the security as well as its corresponding board lot. Prices of stocks move through a scale of minimum price fluctuations.

Board Lot Table:
PRICE MINIMUM FLUCTUATIONS BOARD LOT
0.001 to 0.0024 0.0002 1,000,000
0.0026 to 0.0050 0.0002 1,000,000
0.0055 to 0.0100 0.0005 1,000,000
0.0110 to 0.0250 0.001 100,000
0.0260 to 0.0500 0.001 100,000
0.0525 to 0.1000 0.0025 100,000
0.105 to 0.2500 0.005 10,000
0.2600 to 0.5000 0.01 10,000
0.5100 to 1.000 0.01 10,000
1.020 to 2.500 0.02 1,000
2.550 to 5.000 0.05 1,000 **
5.10 to 10.00 0.10 1,000 *
10.25 to 25.00 0.25 100
25.50 to 50.00 0.50 100
50.50 to 100.00 0.50 100
101.00 to 250.00 1.00 10
252.50 to 500.00 2.50 10
505.00 and up 5.00 10

The following securities fees and taxes (subject to change) are levied on the investors:
FEES/TAXES SELLER BUYER
a. Brokerage Commission (maximum of 1.5% of transaction cost + 12% VAT) X X
b. SCCP Fee of 0.0001 x value of transaction X X
b. Transfer Fee of Php 100.00 + 12% VAT X
d. Cancellation Fee of Php 20.00 + 12% VAT X
e. Stock Transaction Tax (½ of 1% value of transaction in lieu of capital gains tax) X

Illustration:
Buying Transaction:
Mr. X wishes to buy a stock whose market price is P10.00 and with a par value of P1.00. Based on the Board Lot Table, the minimum number of shares he can buy at a regular transaction is 1,000 shares (a). In this case, the amount that he needs is about P10,000.00 plus charges. His required cash outflow will be as follows:
Market price/share P 10.00
Minimum number of shares * x 1,000
P 10,000.00
Broker's Commission (1.5% + 12% VAT) + 168.00
Transfer Fee + 12% VAT + 112.00
SCCP Fee + 1.00
Total Cash Outlay P 10,281.00

Selling Transaction:
Mr. Y wishes to sell a stock whose market price is P5.00 and with a par value of P1.00. Based on the Board Lot Table, the minimum number of shares he can sell at a regular transaction is 1,000 (b). In this case, the proceeds of the sale is about P5,000.00 less charges. His cash inflow will be as follows:
Market price/share P 5.00
Minimum number of shares x 1,000
P 5,000.00
Broker’s Commission (1.5% + 12% VAT) - 84.00
Stock Transaction Tax - 25.00
PCD and SCCP Fees - 0.50
Cancellation Fee + 12% VAT - 22.40
Net Cash Receivable P 4,868.10

HOW CAN I PROFIT IN THE STOCK MARKET?
Investors can profit in the stock market thru any or a combination of the following;
A. Capital Gains - These are profits made due to an increase in the market price of a stock from the buying price.
B. Cash Dividend - A dividend given to shareholders in the form of cash. It is computed by multiplying the number of shares held by the cash dividend rate declared.
C. Stock Dividend - A dividend given to shareholders in the form of additional stocks. It is computed by multiplying the number of shares held by the percentage of the stock dividend declared.
D. Stock Rights - Stock rights offering is the option given to the present shareholders to buy additional shares of stock at a price lower than its market price.

IS THERE ANY RISK INVOLVED IN INVESTING?
Yes, since risk is always a part of any investment. And because stock investment is the most volatile, a better attitude would be to limit and manage your risk. A maximum level of gain or loss should be set and calculated decisions should be made when this level is reached.

DO I NEED TO KEEP TRACK OF MY INVESTMENT?
Yes! Having placed some amount in stocks, you should spend some time and effort in studying your investment. You should keep track of the stock price and follow closely the developments of the company. This way, you are able to foresee possible gains or losses that will guide you in making sound and wise investment decisions.

Daily quotations of stock prices can be obtained from your stockbroker or from all leading newspapers. You may also get information from our official website: www.pse.com.ph.