Basic

The Philippine
Stock Exchange,
Inc.
(‘PSE’ or
EXCHANGE)
 ∞ Overview

∞ Mission and Vision

The Philippine
Stock Exchange, ∞ Trading Mechanism
Inc.
(Introduction) ∞ Investing Procedures

∞ Stocks and Bonds

∞ Classes of Stocks
O The Philippine Stock Exchange, Inc. is
a private organization that provides and
ensures a fair, efficient, transparent and
orderly market for the buying and selling
of securities.
O PSE traces its root from the country’s two
former bourses: The Manila Stock
Exchange (MSE) and the Makati Stock
Exchange (MkSE).
It was founded in March
1927. Regarded as the
first stock exchange in
the Philippines and
one of the oldest in
Asia.

It was established in May

1963. Considered as
the second bourse to
operate in the country.
 PHILIPPINE
MANILA
MAKATI STOCK
STOCK
EXCHANGE

While trading the same listed issues, MSE and MkSE

remained separate entities for almost 30 years. December
23, 1992 marked a milestone for the Philippine capital
market when the MSE and MkSE were unified to become the
Philippine Stock Exchange.
The idea to unite the two exchanges and have it managed by
a professional group became a compelling vision of the
government headed by President Fidel V. Ramos. The idea
was geared towards the development of a more efficient
capital market.

Established
Founded in in May 1927
March 1963
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O brings together companies which aim to raise
capital through the issue of new securities
O plays a vital role in the financing of productive
enterprises that use the funds for growth and
expansion of new jobs
O facilitates the selling and buying of the issued
stocks and warrants
O provides suitable market for the trading of
securities to individuals and organizations
seeking to invest their saving or excess funds
through the purchase of securities
O It provides and ensures a fair, efficient,
transparent and orderly market for the buying
and selling of securities for investors and
stakeholders
O It addresses public demand for speedy access
to information on the securities market
O It offers transparency of listed companies and
ensures full, fair, timely and accurate
disclosure of material information from all
listed companies
O It provides comprehensive market data, stock
quotations, dividend declarations, trading
activities, and other pertinent information on
the PSE, trading participants, listed companies
and other institutions
O It is a critical factor in improving settlement
efficiency, increasing market liquidity and
development of derivative instruments
 Other Board
Members
• Cornelio Peralta
B
• Anabelle Chua O
• Alejandro Yu A
• Amor Iliscupidez R
D
• Eusebio Tanco Ph.D.
O
• Dakila Fonacier F
• Edgardo Lacson D
• Jose Pardo I
• Ma. Vivian Yuchengco R
E
• Jinky Alora C
• Rachelle Blanch T
• Roel Refran O
R
• Susana Serad S
• Val Suarez Esq. Mr. Hans Brinker Makasiar Sicat
• Chief Executive Officer
Marietta Tan
President and Independent Director
• Enrico Trinidad The Philippine Stock Exchange, Inc.

The PSE is committed to:
 Offer products and
services responsive to the
needs of investors and
other stockholders.
 Provide a facility for fair,
accurate, complete and
timely information about
listed companies, while
extending market
education and awareness
programs to investors.
 Be a prepared venue for
raising capital.
 Practice and promote good
governance within the
Exchange and among listed
companies and trading
participants.
 Operate efficiently to
optimize shareholder
value.
 Adopt world-class systems
and global best practices
for an efficient, fair and
orderly market.
 Develop a highly
motivated and professional
workforce committed to
serve and excel.
 A premiere exchange with world-
class standards for trading securities
and raising capital that serves as a
strong engine for a robust company.
 Professionalism in  Mutual respect in
delivering quality service relating with fellow
and in meeting the employees.
highest standards of  Inner strength in
excellence. prioritizing the
 Integrity, transparency common good of the
and accountability in market instead of
implementing business individual interest.
programs and enforcing  Corporate responsibility
decisions.
in promoting market
 Teamwork in working
growth hand in hand
towards a common a
with community
favorable goal for the
welfare.
market.
1. Choose a stockbroker. The PSE has a complete list of
information about all its trading participants who are
authorized and qualified to trade securities for you. This
list is also available on the PSE's website and the
telephone directory's Government and Business listings
yellow pages under the category of stock and bond
brokers. Aside from representing you in the stock
market, a stockbroker can also offer you services such as
access to market reports/studies, on-time delivery of
important documents, and advise on your investments.
It is then important that you trust your stockbroker and
that you are satisfied with its services.
2. You shall be required to open an account and
fill out a Customer Account Information Form
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. There are also
stockbrokers who have an online trading facility
that allows you to post orders by yourself, but
sufficient understanding of how the stock market
works is key. If you choose to be assisted by a
trader or agent, you can discuss with him/her
what stocks you want to buy or sell.
3. Give the order to your trader, and then ask
for the confirmation receipt. Your buy or sell
orders are relayed to the stockbroker's dealer
for execution. In an automated system as in
PSE, the order is keyed in through a trading
terminal and automatically matched.
Confirmation of done trades - via phone,
email or online - is made as soon as possible
and subsequently, an official confirmation or
invoice should be delivered to you.
4. Pay before settlement date. The delivery or
payment should be made before the settlement
date of T+3. For traditional stockbrokers,
settlement of transactions is usually done after
three (3) working days from the transaction date.
This means that for transactions done on
Monday, as an illustration, payment should be
received by Thursday. Meanwhile for online
stockbrokers, settlement of all transactions is
done on the transaction date. Settlement of
accounts is performed by the clearing house.
5. You shall receive from your broker either
the proceeds of sale of your stocks (after 3
business days) or proofs of ownership of
stocks you bought (confirmation receipt and
invoice). If you wish to have a physical
certificate of the stocks you bought, you can
give instructions to your broker and pay the
required upliftment fee.
The Philippine Stock Exchange
Composite Index (PSEi)
http://www.pse.com.ph
Top Gainers
As of January 17, 2014
http://www.pse.com.ph
Top Losers
As of January 17, 2014
http://www.pse.com.ph
Stocks As of January 17, 2014
O Stocks are evidence of ownership in a
company and a claim against a company’s
assets and earnings.
O It is the legal capital of the entity divided into
shares.
O Businesses obtain long term external
financial capital either by obtaining equity
funds or by borrowing. Equity capital may be
obtained by finding new partners with
financial capital to invest or through the
public markets by issuing shares.
O Stockbroker – someone who deals in stocks
and shares
O Stock Certificate – document showing
stockholders ownership in the company
O Stock Dividend – pro rate distribution of
additional shares of a corporation’s own
stock to its stockholders
O Stockholder – an individual or business that
owns shares in a corporation
O Stockholder’s Equity – ownership interest
of stockholders in a corporation
O Stock Market – a stock exchange; the buying
and selling of stocks and shares
O Common stock represents ownership shares in a
corporation. Common stockholders have voting
and dividend rights.
O They also have a claim on all business profits
that remain after the holders of all other classes
of debt and equity securities have received their
coupon payments or returns.
O In the event of bankruptcy, they are paid after
bondholders and preferred stockholders. There
is, however, a greater chance of capital
appreciation by owning common stock.
O Preferred stock is a class of capital stock that has
preference to the firm’s earnings and assets over
common stock.

ELEMENTS OF PREFERRED STOCK:

1. Does not represent an ownership claim.
2. No voting rights unless dividends are missed.
3. Par value is determined through a fixed annual
dividend.
4. Dividends:
• Annual dividends are stated either as
pro amount or a percentage per value
• Received only if declared by the
firm’s Board
• Are paid out after tax earnings and
each flow
• Are taxable when received by
shareholder
O A bond is a written promise by a company,
government, or other institution to pay the
face amount at the maturity date.
O It represents borrowing lending agreements.
Bond holders have the legal status as
creditors, not owners, of the firm.
O They have priority claims on the firm’s cash
flows and assets. This means that they must
receive their interest payments before the
owners receives their dividends
O Bond Discount – the amount below face
value at which a bond is issued
O Bond Premium – the amount in excess of
face value at which a bond is issued
O Bond Dividend – a dividend paid in the
issuing company’s own bonds
O Bond Indenture – agreement between a
bond issue and holder covering the terms of
issue
O Bond Rating – quality ratings of corporate
and municipal bond issues
O Bond Redemption – a transaction in which
bonds are repurchased or retired by the issues
O Bond Valuation – the process followed by an
investor on determining what to pay for a bond
O Par Value (Face Value) – the amount which will
be paid by the debtor or issuer upon maturity
O Maturity – the length of time that has to expire
for face value of the bond to be paid by the
issuer. The periods can range from 45 days
Treasury-bills to 25-year T-bonds
O Bearer – bonus may be paid to the bearer or
holder of the bond
O Mortgage bonds or debentures – bonds which
have as security for its repayment some assets
(usually real estate)
O Bond ratings assess both the collateral
underlying the bonds as well as the ability of
the issuer to make timely payments of
internets and principal.
O The rating can range from D – highly
speculation to triple A (AAA) – fast quality,
least credit risk.
O Government securities are unconditional
obligations of the Republic of the Philippines.
It is backed by the full taxing power of the
national government.

O The government issues two kinds of

government securities:
1. Treasury Bills (T-bills)
2. Treasury Bonds (T-bonds)
O Treasury bills are government securities
which mature in less than a year. T-bills
can be:
1. 91-day bills
2. 182-day bills
3. 364-day bills
O The government can finance its project (fiscal
deficits) by:
1. Borrowing from Bangko Sentral
2. Borrowing from the domestic money
market
3. Borrowing from abroad
The Philippine Stock Exchange
Group 5
DE LAS ALAS,
KRISTILLE
PARADERO,
REVIEL
RAMOS,
ALDRIN
DELA VEGA,
THE END
NIKKO
AFURONG,
KARLO
SIANQUITA,
ROBBIE
ALVAREZ,
AEFRILL
???,
DANISSA