Welcome to Stock Market 101: Philippine Stock Market, where we’ll explore the basics of investing in the Philippine stock market. Whether you’re a beginner looking to dip your toes into the world of stocks or someone curious about the unique features of the Philippine stock market. This guide will provide you with an introductory guide to help you navigate the financial market.

Stock Market 101: Philippine Stock Market

What are Stocks?

A stock is like a piece of a company that you can buy. It’s called a “share” and it means you own a part of the company. The more shares you have, the more you get of the company’s assets and money for dividends and capital appreciation.

What is PSE?

The Philippine Stock Market is a dynamic financial market where various companies stocks or shares are traded. PSE is the only stock market in the Philippines. It serves as a platform for investors to buy and sell ownership interests in publicly listed companies. 

Key Concepts of the Stock Market 

1. Stock Tickers: Each listed company is assigned a unique stock symbol or ticker, representing its shares. Tickers are used for identification and tracking purposes during trading.
2. Indices: Stock market indices provide a snapshot of the overall market performance by tracking a specific group of stocks. In the Philippines, the PSE index (PSEi) is the primary benchmark that reflects the performance of the top 30 companies listed on the PSE.
3. Market Capitalization: It refers to the total value of a company’s outstanding shares in the market. Market capitalization is calculated by multiplying the stock price by the total number of shares.
4. Trading Hours: The Philippine Stock Market operates on weekdays, from Monday to Friday.

PSE Trading Hours in 2023

Time	Market Window	Trading Activity
9:00 AM – 9:15 AM	Pre-Open	Orders can be placed, modified, or cancelled No matching of orders
9:15 AM – 9:30 AM	Pre-Open	No cancellation period
9:30 AM – 12:00 NN	Market Open	Orders can be placed, modified, or cancelled Orders can be matched
12:00 NN – 1:00 PM	Market Recess	Orders cannot be placed
1:00 PM – 2:45 PM	Market Resumption	Orders can be placed, modified, or cancelled Orders can be matched
2:45 PM – 2:47PM	Pre-Close	Orders can be placed, modified, or cancelled No matching of orders
2:48PM – 2:50 PM	Pre-Close	No cancellation period
2:50 PM – 3:00 PM	Run-off	Orders can be placed and matched at closing price
3:00 PM	Market Close	Off-hours orders can be placed, which will be sent to the PSE on the next trading day during pre-open session

Different Types of Stocks

Upon a company go public and be listed on a stock exchange, investors are presented with the opportunity to acquire ownership stakes, referred to as stocks or shares. However, it is crucial to note that there exist two distinct types of stocks or shares that a company may offer to the general public: Common and Preferred.

Common Stock

• Confer voting rights to shareholders in direct proportion to their ownership stakes.
• The majority of stocks or shares available in the stock market are issued in this form.
• Common shareholders are the last in line to receive payments, following creditors, bondholders, and preferred shareholders.

Preferred Stock

• Function similar to bonds, as investors are assured a fixed dividend payment.
• Relatively less abundant in the stock market compared to common stocks or shares.
• Preferred shareholders do not possess voting rights, but they receive payments before common shareholders do.

How to Earn in the Stock Market

Capital Appreciation

Capital Appreciation often referred to as Price Appreciation, is a lucrative investment strategy that entails reaping financial rewards from the upward movement of a stock’s market value. By acquiring stocks at a relatively low price and subsequently selling them at a higher price, investors can generate substantial profits, which are classified as capital gains.

Dividends

On the other hand, dividends represent a means for shareholders to partake in a company’s earnings. As a stakeholder, you become entitled to a share of the profits, which can be distributed in the form of cash, stock, or other valuable assets. The magnitude of dividends is directly proportional to the number of shares you possess, allowing you to enjoy a proportionate portion of the company’s prosperity.

Guide to Different Types of Dividends

• Cash Dividends represent a distribution of the company’s earnings to shareholders in the form of monetary funds, which is the prevailing and widely adopted method of dividend allocation.
• Stock Dividends entail to shareholders are provided with additional company shares instead of receiving cash dividends. This alternative approach is typically communicated to stockholders as a percentage increase in their ownership of shares.

What’s the Difference: Investing vs. Trading

Do you want to be an Investor or Trader?

Investing

Investors take a long-term approach to stock trading, seeking out stocks with substantial growth potential or those that are undervalued. They focus on identifying opportunities for accumulating stocks when prices are trending lower, aiming to secure favorable entry points. Employing the techniques of fundamental analysis, investors thoroughly analyze companies, examining their financial performance and industry standing. This detailed assessment enables investors to make informed decisions based on a stock’s intrinsic value and long-term prospects.

Trading

Traders excel in the art of short-term trading, making swift buying and selling decisions to capitalize on market fluctuations. They diligently study charts, searching for specific formations and patterns that indicate favorable trading setups. Typically, traders prefer to enter positions when stocks exhibit upward momentum, as it presents potential for quick gains. Employing the tools of technical analysis, traders forecast future trends in stock prices, allowing them to make informed decisions in their pursuit of profits.

Essential Things to Do Before Investing in the Stock Market

1. Choose Your Investment Strategy 

Designing a well-balanced portfolio demands careful consideration and planning. It’s crucial to devise an investment strategy that not only aligns with your risk tolerance and investment horizon but also ensures a peaceful night’s sleep. Discover how to navigate the complex world of investments and create a diverse mix of stocks tailored to your needs.

2. Secure Your Investment Capital

While the allure of significant returns may be enticing, it’s wise to exercise prudence and allocate funds responsibly. Building a solid financial foundation should be your initial focus. Before diving into investments, set aside a dedicated portion of your savings exclusively for this purpose. By safeguarding your essential financial obligations, you can confidently embark on your investment journey, remembering the golden rule: “Invest only what you are comfortable risking.”

3. Choose a broker

To participate in stock market transactions, partnering with a reliable broker is the most important part. Online brokers act as intermediaries, facilitating the buying and selling of stocks by connecting buyers and sellers through digital platforms. Your ultimate goal is to find a broker who perfectly aligns with your investment strategy, fulfills your unique requirements, and shares your long-term objectives. Explore the intricacies of selecting the ideal brokerage partner to maximize your investment potential.

Investment Analysis for Philippine Stock Market

Fundamental Analysis

Fundamental analysis is a comprehensive approach that delves into the overall performance and financial strength of a company. It goes beyond just looking at the stock’s price and volume. Instead, it focuses on evaluating various financial drivers and economic data to gain insights into the company’s intrinsic value and potential growth.

By analyzing the overall condition of the industry, market trends, and macroeconomic factors, fundamental analysis aims to predict the future performance of the company. This method considers factors such as revenue, earnings, cash flow, debt levels, and competitive positioning to assess the company’s potential for long-term success.

Technical Analysis

On the other hand, technical analysis takes a different approach by closely examining the stock’s historic price charts and market volumes. This method believes that the past behavior of the stock can provide valuable insights into its future performance.

Technical analysts use various tools and indicators to identify patterns, trends, and signals in the stock’s price movements. By studying chart patterns, support and resistance levels, moving averages, and other technical indicators, they attempt to gauge market sentiment and forecast potential price movements. Technical analysis focuses on timing entry and exit points, as well as identifying potential trend reversals.

Both fundamental and technical analysis have their merits and are used by investors and traders to make informed decisions. While fundamental analysis provides a deeper understanding of the company’s financial health and growth potential, technical analysis helps identify short-term price patterns and trends.

What Type of Investor Are You?

Understanding Your Risk Tolerance and Investment Style

Conservative Investor

• This type of investor prioritizes the preservation of capital and is averse to market volatility.
• They seek the safety of their funds even if it means accepting relatively lower returns.
• Their investment strategy revolves around investing in high-quality blue-chip companies known for their stability and consistent performance.

Moderate Investor

• The moderate investor aims to preserve the majority of their portfolio’s total value but is willing to take on a certain level of risk.
• They are comfortable with accepting lower returns in exchange for some potential losses.
• Dividend-paying securities are attractive to them, as they provide a regular flow of income and stability.

Moderately Aggressive Investor

• Often referred to as “balanced” investors, those with a moderately aggressive stance seek a combination of regular income and capital growth.
• They have a longer time horizon and a medium level of risk tolerance.
• These investors are prepared to accept some volatility and short-term losses in pursuit of higher returns in the long run.

Aggressive Investor

• The aggressive investor embraces market volatility and views market declines as opportunities for potential gains.
• They have a higher risk tolerance and are willing to accept a greater degree of investment risk.
• These investors are driven by the potential for significant long-term returns and are not deterred by short-term losses.

What is Active vs. Passive Investing?

Active Investing

The pursuit of “market-beating” returns and the quest for performance that surpasses benchmark indices characterize active investing. In this approach, portfolio managers engage in constant research, meticulously analyze stocks, and make market forecasts, often taking calculated risks to achieve superior results. However, it is important to note that the pursuit of such outperformance comes at a cost, as actively managed funds typically entail higher fees for investors due to the expertise and resources involved in their management.

Passive Investing

Also known as index fund management, passive investing aims to replicate the returns of a specific market index or benchmark. Rather than actively selecting individual stocks, passive investors seek to mirror the overall performance of the chosen index. Since the management of these funds is less interventionist compared to actively traded funds, the fees associated with passive investing tend to be lower for investors. This approach allows investors to gain exposure to a broad market segment while minimizing costs.

When deciding between active and passive investing, it’s crucial to consider various factors such as investment goals, risk tolerance, and time horizon. While active investing offers the potential for higher returns, it also entails higher costs and greater involvement. On the other hand, passive investing provides a more cost-effective and low-maintenance approach, particularly suitable for investors seeking long-term, diversified exposure to the overall market.

Remember to conduct thorough research, seek professional advice if needed, and make informed investment decisions based on your financial goals and risk tolerance.

Are you interested in the world of stock market investing in the Philippines?

Whether you’re looking to invest in blue-chip stocks or trade in the stock market. Philstock is a trusted and reputable online trading platform that offers a seamless and user-friendly experience for investors of all levels.

We’ll help you how to open a stock market account and start your journey as an investor.

How to Open Philstock Account

1. Go to Philstock registration page.

2. Check and prepare your requirements.

• a. Email address and phone number for verification
• b. A copy of at least two (2) valid IDs
• c. A clear photo of yourself while holding your valid ID.

3. Read and agree to the Terms and Conditions.

4. Select which type of account you would like to open with: Individual Account or Joint Account.

5. Get your reference number and wait for an SMS or Email Notification.

6. Fill out the online registration form:

Contact Information

Source of Income

Investment Profile

Bank Details

7. Upload your Valid ID and take a selfie for verification.

• You will need to upload a clear copy of your valid ID and a “selfie” to verify your identity.
• Take a photo of the front and back portion.
• Capture the image from above, with your ID on a flat surface. Ensure all four corners of your ID are showing.
• Upload a blank paper with one (1) specimen signature for signature
  verification.

Please see the document/s required below for your reference:

List of Primary ID that are accepted by Philstock

• Philippine Passport
• Philippine Driver’s
• License
• Professional Regulatory Commission (PRC) Card
• Postal ID
• Armed Forces of the Philippines ID
• Social Security System

List of Secondary ID that are accepted by Philstock

• Overseas Filipino Worker ID
• OWWA ID
• Seaman’s Book
• Senior Citizen Card
• Voter’s ID
• Company Employment ID
• PAGIBIG ID

8. Fund your account as a requirement to activate it.

By opening a Philstock account, you gain access to a reputable and trusted brokerage firm that offers a user-friendly platform, a variety of investment products, and valuable research tools to help you make informed investment decisions.

Remember to conduct thorough research, seek professional advice if needed, and make informed investment decisions based on your financial goals and risk tolerance.

Investing in the stock market and other financial instruments can be a rewarding and fulfilling in your finances.

Whether you are a beginner looking to dip your toes into the world of investing or a seasoned investor seeking a reliable brokerage partner, First Metro Securities offers a comprehensive suite of services and investment options to suit your needs. As one of the leading brokerage firms in the Philippines, First Metro Securities provides a seamless and user-friendly platform for individuals to start their investment journey. 

How to Open First Metro Account

1. Go to the First Metro Securities website.

2. Choose “Open an Account” and it will go to the registration page. If you already have a Metrobank account it would easier to open and fund for First Metro Securities.

3. Fill out the online application form with the necessary information. This typically includes personal details such as your name, contact information, and identification details.

4. Prepare the required documents to complete the account opening process. This usually includes a valid government-issued ID, proof of billing or residence, and a Tax Identification Number (TIN). Ensure that your documents are valid and up to date.

5. Once you have filled out the online application form and prepared the required documents, submit your application online. 

6. After submitting your application, First Metro Securities will review your information and documents for verification. This process may take a few business days. You may receive email updates regarding the status of your application.

7. Once your account is approved, you will receive instructions on how to fund your First Metro account. Follow the provided instructions to transfer funds from your bank account to your First Metro Securities account.

8. With your First Metro account funded, you can now start exploring the investment options available to you. 

Opening a First Metro account allows you to take advantage of the expertise and resources provided by one of the leading brokerage firms in the Philippines. You can navigate the complexities of the investment landscape with confidence. 

Remember to conduct thorough research, seek professional advice if needed, and make informed investment decisions based on your financial goals and risk tolerance.

Are you interested in investing in the stock market and taking control of your financial future?

Opening a stock market account is a crucial first step towards achieving your investment goals. COL Financial is one of the leading brokerage firms in the Philippines, providing a user-friendly platform for individuals to buy and sell stocks, mutual funds, and other investment instruments.

We will guide you through the process of opening a COL Financial account, equipping you with the knowledge and confidence to embark on your investing journey.

How to Open COL Financial Account

1. Go to COL Financial website.

To begin the account opening process, go to the official website of COL Financial. Look for the “Open a COL Account online” button, which will redirect you to the account registration page.

2. Read the guidliness of COL Financial of the account opening process.

3. Proceed with the online application form.

Fill out the online application form with accurate personal information, including your name, contact details, and employment information. Make sure to provide all the required information and double-check for any errors before proceeding.

4. Submit the necessary document.

Prepare the required documents for account verification. This includes a valid government-issued ID, TIN and proof of address. Scan or take clear photos of these documents and upload them securely on the COL Financial website.

5. Set up your funding source.

Once your account application is approved, you need to set up your funding source. This is where you link your bank account to your COL Financial account for easy fund transfers. Follow the instructions provided by COL Financial to complete this process.

6. Fund your account.

After setting up your funding source, it’s time to fund your COL Financial account. Transfer funds from your linked bank account to your COL Financial account through the designated channels. Ensure that you follow the instructions provided to avoid any delays or issues.

Once your account is funded, you are ready to start trading! Log in to your COL Financial account using your username and password.

Remember to conduct thorough research, seek professional advice if needed, and make informed investment decisions based on your financial goals and risk tolerance.

Are you eager to dive into the world of stock market trading and investment? Look no further than BDO Securities. If you already have an existing BDO account this is the ideal platform to kickstart your journey towards financial growth.

How to Open BDO Securities Account

1. Go to the official website of BDO Securities and select “Create an Account” button.

2. Click the sign up and it direct you to log in your BDO Online Banking credentials.

3. Enter your BDO user ID and password.

4. Complete the online application form Fill out the online application form with accurate and up-to-date information. Provide your personal details, contact information, and financial information as required.

5. Upload the required documents scan or take clear photos of the following:

• Valid government-issued ID (e.g., passport, driver’s license, or postal ID)
• Proof of billing address (e.g., utility bill, credit card statement, or bank statement)
• TIN (Tax Identification Number)

6. Review and submit your application Review all the information you have provided in the application form.

7. Wait for verification and approval BDO Securities will verify the information provided and review your application.

8. Start trading After funding your account, you can access the BDO Securities trading platform and start exploring the available investment options.

Remember to conduct thorough research, seek professional advice if needed, and make informed investment decisions based on your financial goals and risk tolerance.