June 7, 2007
Do you have money that you can use to earn more money?
Try investing in the stock market. This is the advise of Philippine Stock Exchange Inc. which, in coordination with the Department of Trade and Industry provincial office, held a stock market road show in Dagupan.
The PSE is conducting the market road show in different cities of the country to draw in people into investing in stock market. It is a part of the PSE’s intensified campaign to increase stock market awareness in the country to inform more people about the benefits of a long-term investment in securities.
Melchor Guerrero, vice president and head of the Capital Markets Development Division of the PSE, said it was "strange, almost incredible, that in this age of great leap, not even one percent of the 88 million Filipinos has had any experience in stock market investment."
"The problem, we think, is less economic-related than the nearly absolute lack of awareness about what the stock market is all about," he added.
Guerrero disclosed that the Philippines’ stock market is one of the oldest in the region, having been operating since 1927 and would be 80 years old in August.
"One would think that after several decades of existence, it would have emerged the biggest in Asia. Unfortunately, regional market statistics show differently, and neighboring exchanges, relatively younger than ours, have gone far ahead of us in more ways than one," he explained.
During the half-day seminar, the participants composed of businessmen, bankers, academe and local government units, were introduced to basics of stocks trading in the country.
Leo Quinitio, head of the PSE’s market education department lectured on the different kinds of stocks, the risks and rewards of investing in stocks as compared to other investments like deposits, treasury bills, and tangible investments like jewelry and real state, paintings, and precious metals.
Lectures were also conducted on on-line stock trading, investing in equity mutual funds, choosing stocks wisely and listing the companies in the PSE.
Guerrero explained that stocks investment is more risky than other investments, but it offers the highest returns. He gave PLDT as an example of success story as a one million peso worth of shares in the company on May 2004 jumped to P7.2 million worth on May 2006 or a return of 17 percent in two years.
He advised investors to choose companies that are profitable, its profit grows at 30 percent every year for the next 10 years, will be around in the next 20 years and a "Star" in the market.
The road show also informed Pangasinan-based companies about the benefits of going public as an efficient and cost-effective way to raise funds for expansion of business operations.
"This is the best time to invest in local market. The skies are blue. As blue as Pangasinan’s world-class (beaches). We have never before seen an environment this conducive to equities investing. And we want Pangasinenses to gain and benefit from the soaring Philippine stock market," Guerrero said.
He mentioned some advantages of going public (only at the PSE) such as having prestige and goodwill, having better trade credit, increased marketability and attention of investors and faster evaluation for tax purposes.
But there are disadvantages, too, like additional costs to the company, additional controls of management, and market indifference.