Investing in Philippine stocks

I'll talk about investing in Philippine stock market---





First things first, What are stocks?

Stocks are listed shares that offer a chance to buy an equity stake in a company. IF you buy shares of stocks of a company you are considered a part owner of the company. You are entitled to vote in an annual meeting for the company officers and also entitled to receive dividends corresponding to the amount of shares you owned.



How can I buy stocks? You cannot go to the exchange like going to a shop, you must use a stock broker. An investor could buy share of stocks through authorized trading firms. You should open a trading account first before you can buy shares of stocks. You can find the complete list of all the brokerage firms under the trading participants at the Philippine stock Exchange website. As for me since I'm not in the Philippines right now I prefer to use the online brokerage firms, their are several of them like metrobank, accord capital, bpi or citiseconline. The advantage of using online firms is that the commission charges are less.

Once you selected a brokerage firm through online you can download an application forms fill it up and sent it back together with a photocopy of two valid identification. As soon as your application is accepted, they will inform you through e-mail, at this time you can start sending your initial investment. You should tell them exactly how many shares you wish to buy, you must also tell them how much price you are prepared to pay-tell your broker your price limits.

WHAT IS THE MINIMUM AMOUNT NEEDED TO INVEST IN THE STOCK MARKET? In Philippines equity trading is done by board lot or round lot system. The Board Lot Table determines the minimum number of shares one can purchase or sell at a specific price range. Therefore, the minimum amount needed to invest in the stock market varies and will depend on the market price of the security as well as its corresponding board lot.

Here's the Board Lot Table:

-----PRICE--------------- FLUCTUATIONS ----------------- MINIMUM BOARD LOT


---0.001 to 0.0024 -------------0.0002 ------------------------------1,000,000
---0.0026 to 0.0050------------0.0002------------------------------ 1,000,000
---0.0055 to 0.0100------------ 0.0005------------------------------1,000,000
---0.0110 to 0.0250 -------------0.001 ---------------------------------100,000
---0.0260 to 0.0500 -------------0.001 ---------------------------------100,000
---0.0525 to 0.1000 -------------0.0025-------------------------------- 100,000
---0.105 to 0.2500---------------0.005 ----------------------------------10,000
---0.2600 to 0.5000 -------------0.01----------------------------------- 10,000
---0.5100 to 1.000 ----------------0.01 -----------------------------------10,000
---1.020 to 2.500------------------0.02------------------------------------ 1,000
---2.550 to 5.000------------------ 0.05----------------------------------- 1,000
---5.10 to 10.00--------------------- 0.10-----------------------------------1,000
---10.25 to 25.00 -------------------0.25 -------------------------------------100
---25.50 to 50.00------------------- 0.50-------------------------------------100
---50.50 to 100.00-------------------0.50 ------------------------------------100
---101.0 to 250.00-------------------- 1.00-------------------------------------10
---252.50 to 500.00 -------------------2.50------------------------------------10
---505.00 and up ----------------------5.00------------------------------------10


For example:

If you want to buy the stock of a company with a share price of 10 pesos you need to buy 1,000 shares because that's the minimum required as stated in the board lot table. In this regard he needs around 10,000 pesos plus charges.

Market share P 10.00
Minimum number of shares X 1,000
P 10,000.00

plus you have to pay broker's commission, transfer fee + 12% vat, and sccp

Next you need to know the bid price of a stock to know how much and how many shares you can buy in a certain stocks.





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