PSE Lec2

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This is the next powerpoint presentation of Mr. Mark Valino about stock market investing.

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PSE Lec2

  1. 1. Investing in the Stock Market<br />A presentation prepared by the Market Education Department Capital Markets Development Division<br />website: www.pse.com.ph<br />e-mail: marketeducation@pse.com.ph<br />tel.no: (632) 688-7536<br />www.facebook.com/pages/The-Philippine-Stock-Exchange<br />http://twitter.com/PhStockExchange<br />http://thephilstockexchange.multiply.com<br />
  2. 2. Table of Contents<br /><ul><li> Stocks
  3. 3. Stock Market
  4. 4. Stocks: Types, classes, and forms
  5. 5. Investment Instruments
  6. 6. Concept of Risks and Rewards</li></ul>www.pse.com.ph<br />
  7. 7. Table of Contents<br /><ul><li>Primary and Secondary Markets
  8. 8. Opening a Trading Account
  9. 9. Trading Schedule
  10. 10. Understanding Stock Market Quotes
  11. 11. Sources of Market Information</li></ul>www.pse.com.ph<br />
  12. 12. STOCK<br />Definition and concept<br />STOCKSare shares of ownership in a corporation. When you buy stocks of a publicly listed company, you become a stockholder or shareholder of that company. In other words, you become a part owner. <br />Thus, you participate in the company’s growth and future profits. <br />Conversely, you may also lose if the company suffers a loss or performs below market expectations.<br />www.pse.com.ph<br />
  13. 13. STOCK MARKET<br />Definition and concept<br />STOCK MARKET is a place where stocks are bought and sold. The Philippine stock market is the place where people can invest in publicly listed corporations.<br />www.pse.com.ph<br />
  14. 14. STOCKS<br />According to types<br />PREFERRED STOCK is a security whereby the holder has a higher claim on the assets and earnings of the company. <br />Preferred shareholders have priority over common shareholders in the event of liquidation and they have a fixed dividend. <br />Unlike common shareholders, preferred shareholders do not have voting rights.<br />COMMON STOCK is security whereby the holder exercise control by electing board of directors and voting on corporate policies or matters. <br />In the event of liquidation, common stockholders have rights to the company’s assets only after preferred stockholders have been paid in full. <br />www.pse.com.ph<br />
  15. 15. STOCKS<br />According to class<br />CLASS ASTOCKS are shares that can be bought or sold solely by Filipino investors.<br />CLASS BSTOCKS are shares that can be bought or sold by both Filipinos and foreign investors.<br />www.pse.com.ph<br />
  16. 16. STOCKS<br />Other types <br />BLUE CHIPS are the share of stable, profitable, and well-known public companies.<br />They have a long history of steady revenues and dividend payments. <br />They exhibit more modest but dependable returns and are relatively of lower risk. <br />www.pse.com.ph<br />
  17. 17. STOCKS<br />Other types <br />INCOME STOCKS are equity security that pays regular, often steadily increasing dividends, and offers a high yield that may generate the majority of overall returns. <br />It has a lower level of volatility than the overall stock market. <br />www.pse.com.ph<br />
  18. 18. STOCKS<br />Other types <br />GROWTH STOCKS are shares of corporations whose earnings are expected to grow at an above-average rate relative to the market.<br />A growth stock does not usually pay dividend. Rather, earnings are reinvested in capital projects. <br />www.pse.com.ph<br />
  19. 19. STOCKS<br />Other types <br />DEFENSIVE STOCKS are shares that provide constant dividend and stable earnings, regardless of the overall condition of the stock market.<br />They remain stable during the various stages of the business cycle.<br />www.pse.com.ph<br />
  20. 20. STOCKS<br />Other types <br />CYCLICAL STOCKS are those that rise quickly when economic growth is strong and falls rapidly when growth is slowing down. <br />www.pse.com.ph<br />
  21. 21. STOCKS<br />Other types <br />SPECULATIVE STOCKS are those that rise quickly when economic growth is strong and falls rapidly when growth is slowing down. <br />www.pse.com.ph<br />
  22. 22. INVESTMENT INSTRUMENTS<br />Fixed Income vs. Variable Income<br />FIXED INCOME INSTRUMENTS are those that provide a return in the form of fixed period payments and the eventual return of principal at maturity. <br />Examples are savings, Treasury bills, and government bonds.<br />VARIABLE INCOME INSTRUMENTS are those that provide a return based on an underlying measure such as short-term interest rates. <br />www.pse.com.ph<br />
  23. 23. RISK AND REWARD<br />Investment Pyramid<br />RISK PROFILE<br />The RISK-REWARD Concept: <br />The higher the risk of an investment instrument, the higher returns you should receive in the future.<br />www.pse.com.ph<br />
  24. 24. TYPES OF MARKETS<br />Primary and Secondary Markets<br />PRIMARY MARKET<br />The higher the risk of an investment instrument, the higher returns you should receive in the future.<br />www.pse.com.ph<br />
  25. 25. TYPES OF MARKETS<br />Primary and Secondary Markets<br />SECONDARY MARKET<br />is where investors purchase securities or assets from other investors, rather than from issuing companies themselves. <br />www.pse.com.ph<br />
  26. 26. OPENING A TRADING ACCOUNT<br />Investment Procedures<br /><ul><li>Select your STOCKBROKER.
  27. 27. Open a TRADING ACCOUNT.
  28. 28. Discuss with your broker the stocks you </li></ul> wish to BUY or SELL.<br /><ul><li>Give ORDERS to the brokers.
  29. 29. Get the CONFIRMATION RECEIPT.
  30. 30. Deliver / pay before SETTLEMENT DATE.
  31. 31. Receive PAYMENT.</li></ul>www.pse.com.ph<br />
  32. 32. TRADING SCHEDULE<br />Day and Time<br />9:00 AM – 9:15 AM <br />PRE-OPEN<br />9:15 AM – 9:30 AM <br />PRE-OPEN (No cancellation period)<br />9:30 AM <br />MARKET OPEN<br />9:30 AM – 11:57 AM<br />CONTINUOUS TRADING<br />11:57 AM – 11:59 AM<br />PRE-CLOSE (No cancellation period)<br />12:00 NN<br /> MARKET CLOSE<br />12:00 NN – 12:10 PM<br />TRADING AT-LAST (Run off)<br />12:10 PM<br />MARKET CLOSE<br />www.pse.com.ph<br />
  33. 33. STOCK MARKET QUOTATIONS<br />NAME<br />The stock symbol of the listed company.<br />OPEN<br />The first price the stock traded for the day.<br />BID<br />The highest buying price in the market.<br />ASK<br />The lowest selling price in the market.<br />HIGH<br />The highest price traded for the period.<br />LOW<br />The lowest price traded for the period.<br />CLOSE<br />The last traded price of the stock at noon of the trading day<br />Reading and Analyzing<br />www.pse.com.ph<br />
  34. 34. STOCK MARKET QUOTATIONS<br />Reading and Analyzing<br />VOLUME OF SHARES<br />The total number of shares traded in the stock market during a period.<br />VALUE OF SHARES<br />The currency value of shares traded in the market during a period.<br />www.pse.com.ph<br />
  35. 35. STOCK MARKET QUOTATIONS<br />Reading and Analyzing<br />PHILIPPINE STOCK EXCHANGE COMPOSITE INDEX (PSEi)<br />is a fixed basket of 30 common stocks of listed companies, carefully selected to represent the general movement of the stock market. <br />It is the benchmark measuring the performance of the Philippine stock market.<br />The selection of these companies is based on a specific set of criteria.<br />www.pse.com.ph<br />
  36. 36. STOCK MARKET QUOTATIONS<br />Reading and Analyzing<br />GAINERS<br />The stocks with the highest percentage increase in price during a period.<br />LOSERS<br />The stocks with the highest percentage decrease in price during a period.<br />MOST ACTIVE<br />The stocks with the most frequent transaction during a period.<br />www.pse.com.ph<br />
  37. 37. SOURCES OF INFORMATION<br />Broadsheets and Daily Quotations<br />www.pse.com.ph<br />
  38. 38. SOURCES OF INFORMATION<br />Television and Radio<br />www.pse.com.ph<br />
  39. 39. SOURCES OF INFORMATION<br />Data Providers<br />www.pse.com.ph<br />
  40. 40. SOURCES OF INFORMATION<br />Internet<br />PSE / MED SOCIAL SITES<br />OFFICIAL PSE WEBSITE<br />The Philippine Stock Exchange, Inc.<br />http://thephilstockexchange.multiply.com<br />www.pse.com.ph<br />http://twitter.com/PhStockExchange<br />www.pse.com.ph<br />
  41. 41. SOURCES OF INFORMATION<br />Electronic Billboards<br />www.pse.com.ph<br />
  42. 42. Investing in the Stock Market<br />A presentation prepared by the Market Education Department Capital Markets Development Division<br />website: www.pse.com.ph<br />e-mail: marketeducation@pse.com.ph<br />tel.no: (632) 688-7536<br />www.facebook.com/pages/The-Philippine-Stock-Exchange<br />http://twitter.com/PhStockExchange<br />http://thephilstockexchange.multiply.com<br />

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