The Philippine stock is the first and the longest operating stock market (since 1927) in Southeast Asia. Despite its being the first and being the longest operating stock exchange sadly it is one of the smallest in terms of trading volume, known as having the shortest trading hours of any stock exchange in Asia and is among the stock exchange having the least involvement among its citizens.
It is said that more foreigners are actively investing in the Philippine stock market than the Filipinos themselves. A pathetic less than 1 % of the entire Philippine population is investing in the Philippine stock market. As one newspaper comments, the growth of the Philippine stock market reflects the poor economic growth of the country.
Nevertheless despite its slow or even near stagnant growth, opportunities abound in the Philippine stock market. Just like any stock market, investing in the Philippine stock market can be quite profitable. Because of its current situation, the Philippine stock market has more room and opportunities for growth considering also the fact that the eyes of the world are now focused on Asia. It is my humble opinion that a tsunami of economic growth will soon inundate Southeast Asia in particular and that the Philippine stock market will hopefully ride at the top of the wave. That is why I consider it a blessing and an opportunity to be investing in the Philippine stock market.
One of our readers who is new to investing in the Philippine stock market has asked several questions with regards to the matter. I hope to help educate the public with regards to investing in the Philippine stock market so I am sharing to all of you her questions.
Thanks for your queries with regards to investing in the Philippine stock market. I am always willing to answer questions. Normally I answer questions comprehensively via blog post for various reasons which I already have mentioned in my other posts. However take note that I have blogged about your questions so my answers below will refer you to some past posts I have written on the matter. Judging by your latest comment in my blog it seems that you have already read some of the posts in my blog regarding investing in the Philippine stock market. However, just to be sure, I will still try to answer the questions you sent via email and via a comment.
I have been wanting to write a free ebook on the subject, but I am still collecting ideas on how to go about it, how to make it more user friendly for newbies to investing in the Philippines stock market and what will be its general format and outline. In a sense the posts that I write and will be writing regarding investing in the Philippine stock market will form part of a future ebook on the subject. So keep your questions coming as it will give me an idea on what newbies in the stock market are looking for. Add to this is the fact that it forces me to write about the subject.
I’ve tried to collate your questions. Here are my answers to your questions regarding investing in the Philippine stock market and online trading in particular.
1.) Have you tried online trading like the one offered by BPI and other banks? I’ve been thinking on participating in buying/selling stocks BUT, i don’t even know how to buy/sell stocks!
– Yes I have, I’ve been doing online stock market trading for almost 5 years now. I mainly use BPI but I am not saying it is the one that you should use. You should try out other online stock trading services and decided for yourself which you should use. I highly recommend both BPI Trade and Citseconline. They each have their Pros and cons and I have written about this in the blog post entitled “How to invest in the Philippine Stock Market – Part 3” subtitled: Starting to trade online.
2.) Is it true that online trading system offered by banks will enable you to buy/sell stocks real time?
Technically yes. Banks not only do Outer banks foreclosures they also do online stock trading. Aside from banks, other licensed stock brokers offer online trading as well. In online trading, you can buy and sell stocks in real time. The Philippine stock market opens at about 9: 30 a.m. Closing bell is at 12:30 p.m. A two hour afternoon trading session is planned to be added starting June 30, 2009. You can also enter “off hours” order even after trading hours.
3.) Does that mean that in a span of one day, I will be able to buy/sell my stocks as many times as I want? Is that possible?
Yes you can buy and sell stocks as many times as you want. However compared to other stock markets wherein there are lots of trading activities and the stock price wildly fluctuates in a matter of minutes the Philippine stock market is quite small, so it really makes no sense to buy a stock and sell it within the same day. (Although some day traders do this sometimes)
Those who dubbed themselves as “daytraders” can’t even do day trading in the strictest sense of the word. They are more of “week traders” “days trader” 🙂 (Day trading is defined in wikipedia “ the practice of buying and selling financial instruments within the same trading day such that all positions are usually closed before the market close of the trading day.”) I would say that day trading in the Philippine stock market would be non-existent unless the market volume increases and the trading hours are extended. There is a new development that the Philippine stock exchange is planning to link with several other Southeast Asian Stock exchanges within the next 3 to 5 years. This is good news for all stock market enthusiast especially the day traders.
4.) I looked at the demo of BPI online trading. Before you can actually BUY/SELL stocks, you must enter the Volume and the Price (is this price per unit?). I’m not sure what price to enter, do I enter the previous close price when buying or selling?
You may enter any price for as long as it is within the price limits. The price referred to there is “price per share.”
Remember that the Philippine stock market is a “market.” In a market the price, buying and selling depends on the law of supply and demand. In a sense when you enter a price for a certain stock you are offering to buy such stock for a certain price. Your online broker will then post your offer at the market and inform everybody that you are willing to buy a certain stock at a certain price. If nobody is interested in your offer than you can’t buy the stock you are trying to buy. If somebody would like to sell the stock you want to buy at the price you have proposed then you have a “match.” The same thing goes on for the selling process. So literally there are hundreds if not thousands of buying and selling activities going on every minute or hour during the trading hours at the Philippine stock exchange.
5.)” . . .. just emailed you a while ago and have been reading your posts for 2 hours now…I really wanted to do online trading (BPI) but it seems I really have a LOT of stuff to learn”
Although this is not a question you have asked, I would like to comment on what you said. I am glad that you have found interest in investing in the Philippine stock market.
I’ve always been an advocate in investing in the Philippine stock market. I even have disagreement with my family especially my mother and my brother. My mother firmly believes in investing in real estate, while my brother firmly believes in investing in start up businesses. While I do not dispute the fact that these ventures could also reap handsome profits, for me nothing beats investing in the Philippine stock market (I would always argue that Warren Buffett is more rich than Donald Trump:-) ) However before investing in the Philippine stock market, YOU MUST KNOW EXACTLY WHAT YOU ARE DOING. To do this you must do a lot of research and study. By the way I suggest you read my post first on the advantages of investing in the Philippine stock market in the post entitled “How to invest in the Philippine stock market – Part 2.”
Although I blog about a variety of topics, investing in the Philippine stock market is one of the main topics of this blog and they are all contained in the category entitled “Financial management and investments.” You might want to click on this and check out more post about investing in the Philippine stock market. Yes indeed, investing in the Philippine stock market requires a lot of hard work and lots of study. I would advice you not to give up and continue reading and researching about the subject matter. After a year or so you will somehow gain a mastery on investing in the Philippine stock market.
From time to time drop by this blog and you will find some gems of wisdom with regards to investing in the Philippine stock market. Should you have further questions please don’t hesitate to drop me a comment. I’ll be more than glad to answer your questions.
The Guerilla investor 🙂