Salve Says: A beginner's guide to investing in stocks

The stock market is fraught with risk, so it is important to arm yourself with investing smarts before you part with your hard-earned cash.

When you buy a share in a company, you become a part owner without worrying about running its daily operations.

You make money when the company earns a profit. However, you also lose money when the company does.

You can make a profit from the stock market by selling your stocks when the market prices them higher than when you bought them, Marvin Germo, a registered financial planner told ANC's "On The Money."

Share prices fluctuate every trading day depending on how the company performs. When there's negative news about a company, like when it reports a loss instead of a profit, its share price can go down.

An investor can also earn through dividends, which the company pays existing shareholders at specific periods.

"If you're a person who wants to be more passive, you want to get dividends, the more shares you accumulate, the more blocks you get, later on, the more dividends you will get also," Germo said.

The first step in investing in equities is to open a brokerage account and choose the right stock broker, said Salve Duplito, resident financial adviser of "On The Money,"

A directory of stockbrokers is available on the Philippine Stock Exchange (PSE) website.

Duplito said investors should find a broker whom they trust and works for a well-managed brokerage house that will allow them to transact easily online, which can be cheaper.

source: www.abs-cbnnews.com

Markets to stay jittery amid deluge of economic data

Expect a lot of 'short-term' noise to keep investors on edge and on the sidelines this week, as focus shifts to economic data out of the US, China, and Japan.

On Tuesday, Japan's Abenomics gets another pulse check, as household spending, employment and retail sales data are released, industrial production numbers are out on Wednesday. Friday will be a big day --- the Bank of Japan releases its business sentiment survey -- the Tankan Survey, China manufacturing and services index are also out, while the US releases non-farm payrolls for March. A Reuters poll shows payrolls are expected to have increased by 200,000 jobs in March, below February's 242,000 gain.

Angel Pacis, First Vice President & Trust Officer at East West Bank says the 'markets are living on day-to-day data' when it comes to the actual policy the Fed will be taking going forward.

"They call it the 'sweet spot' in terms of data, good enough to signal the US economy is continuing its current track, but not strong enough to encourage more aggressive rate hike stance from the Fed. That's what the market is looking for to continue its upward trajectory."

CONGLOMERATE PLAY : ALPHA PLAY

In the meantime, Pacis is placing her bets on conglomerates this year, which she says will continue to benefit from strong economic growth and domestic dependence, as well as incentives for infrastructure play.

"Ayala Corp is into infrastructure, it's a good proxy for the Philippine economy, plus it's also in sectors that are expected to grow faster like education and power. While we like Metro Pacific because of valuations."

SM investments is also a stock pick.

These companies are expected to outpace expected average growth of 10% this year.

East West bank's year-end forecast is at 7400.

RCBC BACK IN SPOTLIGHT

Pacis believes while sentiment on RCBC will continue to take a hit, triggering retail selling, she says overall -- the bank won't see any big negative impact on bottomline. She adds, banks in general are in a stable position.

"This is what I call noise. The Philippine Banking Sector is in a very stable position and any selldown which brings it to fair value should be an opportunity to pick up stocks."

The Senate resumes its third hearing on the alleged $81-M Money Laundering case, on Tuesday, March 29.

source: www.abs-cbnnews.com

PH shares too expensive - Credit Suisse

MANILA - Credit Suisse on Wednesday said Philippine shares are still too expensive.

Right now, with the Philippine Stock Exchange index (PSEi) at 7,000, Philippine shares are trading at an average price to earnings ratio of 18 to 19 times, meaning investors are paying roughly 18 times what the company earns per share.

That is one of the most expensive in the region.

Credit Suisse said many investors are waiting for the price-earnings (PE) ratio to fall to 15 times and below.

"You can achieve that drop two ways, either through a price correction or through improved corporate earnings. The one theme over the next six months for the Philippines, I think, and this is where you are going to get positive surprises, is in corporate earnings, whether it be through consumer companies, because I think domestic consumption will remain strong, or through companies that benefit from these low commodity prices," said Robert Parker, senior advisor for investment strategy and research at Credit Suisse.

A local broker estimates the PSEi would need to fall 1,400 points to get to a 15 price earnings ratio--a 20 percent drop.

Counting on rising earnings may be difficult because earnings growth has been mostly disappointing.

COL Financial says two-fifths of the 56 listed companies it covers reported weaker than expected profit in the first half.

Meanwhile, a Philippine broker said the fall in PE doesn't have to be so big, estimating a PE of 16 to 17 would already be attractive. -- ANC

source: www.abs-cbnnews.com

Investing for beginners: 5 steps to get started on stock investing

MANILA, Philippines - With the Philippine Stock Exchange index hitting new highs, many Filipinos are now realizing the advantages of investing their hard-earned money, versus simply parking it in a savings account or time deposit.

If you’re new to the investing game, you’ve probably wondered if you should be putting some of your savings in the stock market to take advantage of the trend.

Investing in shares of stocks or equities is one way to increase your wealth, but note some have also lost it overnight.

Stocks can grow in value, providing you with returns that may be higher than what you can get from putting your money in savings instruments or the money market. However, that is just half of the story — stock investing also comes with a measure of risk and if you are not careful, you may lose some, if not all of your capital.

Here are five steps to get you started on investing in equities:

1. Assess yourself.
Before you begin to invest in stocks, it is important to know what you need and want, and to determine if equity investing is for you.

Here are some questions to ask yourself:

What are your financial goals?

Before investing on anything, know your financial objectives vis-à-vis your current financial assets and your life stage. This will give you an idea as to how to craft your investment strategy. The investment strategy of a 50-year old retiree with real estate, money market placements, and insurance plans will obviously be very different from a 21-year-old who has just received his first bonus. Once you have an investment strategy in place, then you can decide on what investment vehicles are best for you, including equities.

What is your appetite for risk?
Stock investing, it must be stressed, is not for everyone. Equities carry risks, and the money you put into shares of stock is not insured by the government. Therefore, if you are not in a position to lose part or all of your investment money, stocks may not be a suitable option for you. Equities are best for those who are willing to take on a degree of risk in exchange for larger gains.

What other investments do you have?

Investing in equities should be seen in the context of your entire investment portfolio, with a goal to diversify your holdings in order to manage your risks.

What is your time frame?

Studies have also shown that equities tend to grow in value over a long period of time. Stocks are best for those without time pressures to deal with.

Do you have the time and the capacity to manage your stock portfolio?

Stock investing requires understanding how the market works, as well as the companies whose shares you intend to buy. If you do not have both, then you should look for a broker to help you manage your stock transactions.

2. Find a stockbroker.

The Philippine Stock Exchange has a list of brokers that you can refer to. There are also brokerage houses that allow you to do online trading, which some find to be a more convenient way of handling transactions. Some banks also offer stock broking services. Brokers differ in the range of services they offer, as well as in the minimum investment amount that they require.

The larger brokerages servicing institutions and high-net-worth individuals typically offer research services on top of trading, while smaller ones can simply offer trading services. Ideally, your broker would take the time to ask you about your investment goals and ask about your appetite for risk.

3. Open a trading account.

Your selected broker will give you a list of requirements to fulfill. Make sure you understand its conditions well. Take note of transaction fees and other rules, like how to transact. If you will use an online trading platform, take the time to familiarize yourself with how it works.

4. Monitor your investments.

Periodically monitor the movement of the stocks in your portfolio. Closing prices may be monitored online, on TV and in business newspapers. Keep yourself informed of any dividend announcements, which may entitle you to cash or additional shares of stock.

5. Evaluate your investment strategy regularly.

Does it still dovetail with your financial goals? From time to time, you may wish to continue to add to your stock portfolio, or if it is time to allocate some funds to other investment platforms, based on changes in your personal circumstances and goals.

One last but very important point: Do not think of stock investing as a form of gambling.

While you might have heard of people who have amassed a fortune overnight over a single stock, this is the exception and not the rule. Investing in stocks and in everything else requires an understanding of your goals, patience, and a lot of ground work. This point will be the common thread in this series of four articles on how to get started on investing in different financial products.

source: www.abs-cbnnewws.com

Philippine index eases ahead of rate decision

BANGKOK - Southeast Asian stock markets were range-bound on Wednesday as stocks in the Philippines extended losses a day before its central bank meets on policy interest rates, while weak earnings by large-caps weighed on regional sentiment.

The Philippine main index was down 0.5 percent to 7,686.43 amid selling in recent gainers such as Petron Corp and Universal Robina Corp.

The Philippine central bank is expected to leave interest rates on hold on Thursday and keep policy largely unchanged until after the U.S. Federal Reserve increases rates there.

Singapore's key index rose 0.2 percent, with large-cap shares mixed. Global Logistic Properties was the top gainer, while Oversea-Chinese Banking Corp fell after its quarterly earnings came in below forecasts.

The Thai SET index was down 0.2 percent. Total Access Communication Pcl dropped 2 percent after the mobile operator missed expectations for its fourth-quarter earnings.

Brokers in Bangkok cited concerns about Greece.

Asian stock markets turned cautious on Wednesday, while the U.S. dollar crept higher as looming euro zone meetings to discuss the Greek debt crisis threatened to produce more confusion than clarity.

"Overall, further stock market consolidation is likely, awaiting more information on Greece's debt issue," strategists at KGI Securities wrote in a report.

Malaysia headed for a third straight day of falls ahead of fourth-quarter growth data.

Sluggish global demand for its exports and weak commodity prices are expected to have dragged Malaysia's economic growth in the fourth quarter of 2014 to its weakest pace in more than a year.

The Jakarta composite index rose slightly, recovering from Tuesday's loss.

Vietnam's benchmark VN Index climbed 1 percent, with most blue-chips advancing.

source: www.abs-cbnnews.com

Philippine shares set to lead January gains

BANGKOK - Most Southeast Asian stock markets edged higher on Friday, with the Philippine index heading for its biggest monthly gain in almost a year but the Thai benchmark slipped into negative territory amid selling in the low free float Bank of Ayudhya (BAY) shares.

Asian shares edged up on Friday, taking heart from a late earnings-led surge on Wall Street even as continuing concerns about global growth tempered gains while oil prices dipped as analysts said the outlook remained weak.

The Philippine index was up 0.8 percent, recovering from a fall on the previous day. It is heading for a gain of 6.2 percent in January, the biggest since February 2014 and is the best performer in the region thanks to its strong economic outlook.

Energy shares rebounded, led by Petron Corp and Energy Development Corp.

The Thai SET index eased 0.1 percent to 1,584.96, trimming some early losses, with Bank of Ayudhya shares falling 1 percent. BAY shares have risen by more than half so far in the month, bringing SET's gain to 5.8 percent, among Asia's outperformers.

Broker Maybank Kim Eng Securities said in a report the SET index could break 1,600, depending on movement in Bank of Ayudhya shares. Broker Phillip Securities expected SET to trade in a range of 1,575-1,600, citing BAY shares among market risks.

"The continued effects of extreme volatility in BAY shares may keep the downside risk in the Thai stock market intact while the pace of foreign buying dissipated for the first time on Thursday," strategists at Phillip wrote in a report.

The Thai bourse reported net foreign buying of shares worth 755 million baht ($23 million) on Thursday, compared with a daily net purchase of more than 3 billion baht ($91.80 million) in the previous two days.

Stocks in Singapore and Malaysia were a tad higher, with Indonesia up 0.5 percent. Vietnam .VNI bucked the trend, sliding 1.5 percent.

"Today's sentiment should be slightly improved given Wall Street's overnight turnaround but investors would be more cautious of the recent volatility which would likely cap upside," broker NRA Capital said of the Singapore stock market.

All Southeast Asian stock markets are heading for gains in January, with Vietnam climbing 5.8 percent while Singapore, Malaysia and Indonesia each more than 1 percent higher.

The Malaysian stock market will be closed on Monday and Tuesday for public holidays.

source: www.abs-cbnnews.com