Will We See REIT's as an Investment Option in 2013?

REIT stands for Real Estate Investment Trust.

REITs are tradable securities whose underlying assets are property portfolios that earn from either real estate sales or rent.

They are issued by property developers and sold to investors whose funds are then reinvested into new property developments. [via Inquirer.net]

REIT makes it easier for small time investors to participate in investing in the real-estate market.

Although the REIT law was passed way back in 2009, there are still no offers available in the market. Issuers are not participating because of the government's stand on taxing this investment vehicle. Industry players are asking for a middle ground to this law, but the department of finance is not budging.

PSE will propose a set of regulations that will hopefully address the issue of the players involved. They target to have the first REIT offering in 2013.

Personally, this is an interesting opportunity because I believe real-estate in the Philippines is still undervalued. There's much room to grow thus the potential for generating income is also great.

Another All-Time High for PSE, passing beyond the 5,800 mark

In my previous post, I said that a healthy correction happened yesterday. A correction or retracement or reversal describes when the market goes down after it has gone up for a period of time.  It seems like a good retracement indeed, the Philippine Stock Market index today breached the 5,800 mark.

Even foreign investors are putting money in the Philippines except for Nomura. Though he's right in saying that the stock prices are becoming expensive, I believe the options are not yet exhausted though. There are still undervalued blue chips in the market. Probably a good time to invest in these because investors are now eyeing them.

For the month of December, my fearless forecast is it will continue to go up probably up to 5900+ by end of the year. Though I find it worrisome that the stock market is rising up too fast. Come January, we may see some large corrections until the market can breathe again.

DNL IPO on December 12

People who do stocks are all-eyes on D&L Industries, Inc. (Symbol: DNL) tomorrow, which will commence its initial public offering (IPO). Almost always, IPO's are hyped probably because it doesn't happen always, although this year there were already several companies who IPO'ed prior to DNL: GT Cap, East West Bank, Coal Asia, and Yehey (Although technically, YEHEY listed by way of introduction and is not considered IPO).

If there's hype, there's demand. DNL will be priced at P4.30 when it opens tomorrow, December 12, 2012. I read that it's over-subscribed; it means there's a strong demand. I didn't compute the P/E on my own but I read it's around 13.35. If it's true, the price is about average but on the lower end because P/E's are usually 16-17, but it should be compared with PE's of companies in the same industry.

I haven't participated in any IPO's yet, but I have already observed two. It's always hyped, and it usually goes up in the first day of trading, maybe even a few days after, then tumbles down after. DNL is a big company. It manufactures food additives and supplies large restaurants including Jollibee and Max's. This alone can attract attention and boost the hype.

For those who didn't have the chance to subscribe to IPO price, maybe you can buy tomorrow if the demand is good. But as with any IPO, I wouldn't advise you to hold it for too long until track record is proven, who knows, DNL can even be a blue chip someday.

And to add even more to the hype, DNL even have a countdown timer in its website:

Note: this is just an image and it is not working

Will Santa Claus Rally Start Soon?

In the stock market world, there's this thing called Santa Claus Rally. It is the rise of stock prices in the month of December. People are generally happy and have more money during this time of the year; thus people tend to invest more. It is also during this time when additional trades must be done for tax reasons.

Image from financialpost.com

The Philippine stock market is down 36 points today. It shouldn't be much of a worry, hopefully it is a healthy correction from the fast rise of the stock market last week. Let's see what happens tomorrow. My trades so far are producing fruits, thanks to the support group in the office who started way way before me. Currently holding MEG, MWC, UBP and AEV.

So will Santa Claus Rally start tomorrow? Nobody knows!

PSE reaches a new all-time high

For the first time, the Philippine stock market advanced beyond 5600 points. Exciting times! I wonder how long will this growth be sustained. Still need to be vigilant on the looming US fiscal cliff issue and EU's never-ending financial problem.

Seems our economy is booming. Philippine economy grew by 7.1%, beyond the 5.5% expectation and GDP is up 6.5%, already beyond the government's target of 5-6% by year-end. The Philippines was recently  included in the Newly Industrialized Country (NIC) category, which is a term for a country that is beyond a developing one but does not yet satisfy the signs of a developed country; it's like a 2nd-world country lol. So far, inflation is under control at 3.1% last October. These are good signs; more reasons to invest and believe in our country!

I'm happy today because two of my stocks are on the positive side: Manila Water (MWC) and SM Prime Holdings (SMPH). The golden question is when should I sell to realize my profit?

BPI raises SDA minimum to 500K

In my previous post, I wrote about investing in SDA, and choosing BPI because it had the lowest minimum investment which was only P50,000. Now, BPI announced it is raising the minimum investment to P500,000 effective this December. And my investment is below that amount.

What will happen to enrolled accounts with less than 500K

I talked to a BPI representative, and she said that the amount will placed to the settlement account if the enrolled amount is less than the minimum. It will not be re-enrolled this December. My investment is due every 28th of the month; she said that it is eligible for one last iteration.

What's the next best thing to do

I'm not sure yet, whether to just to invest it in bond or place it somewhere else. Then it will be subject to a holding period, where there is a pre-termination fee should you decide to withdraw it earlier than the required period.

[Update 1/13/2013] BPI Maxi Saver may be the next best thing, which shares similar features with SDA. It is liquid, in fact there's no lock-up period and low risk which is ideal for emergency funds. 1.25% interest + 1% bonus if you don't withdraw any money.

Blue Chip Companies in the Philippines

You can check the list of Blue Chips here:
http://www.pesobility.com/stock/blue-chips


Last week, I started investing in the Philippine stock market. So far so good, I invested in several blue chips MWC, SMPH, and MEG in which some went up and some went down. The index of Philippine Stock Exchange currently consists of the 30 major companies. I've added the list in the community wiki. These are the blue chips of the Philippines. They're relatively a better bet than other stocks because they tend to be more stable.

I gained 1.3% so far, and I believe it's still beginner's luck. 1.3% may seems small, but compared to how much a bank savings account make? Like 0.5% per year?

It was quite an experience, but I still have tons more to learn. I don't know how to read financial statements or compute the actual price/earning ratio. I need to research more about the fundamental and technical analyses. These are the two main schools of thought when it comes to investing in stocks; fundamental teaches you what to buy and technical teaches you when to buy.

I will continue to write more about my experience in the stock market soon, but as for now, I need to sleep.

Ayala Corp. (AC) Bond Issued (7 years)

Ayala Corp. (AC) has issued a 7-year bond at 7.45% interest. 7.45% is relatively low; e.g. SMC Series 2A Preferred shares issued this year were 7.5% for 5 years.  However, considering how low the government bonds are right now, some may also favor this deal from AC.

Would I lend AC money? No. Even though AC is a good company, this is not for me. Maybe if I have millions of parked money, but for a small time investor like me, this is not the place where I put my money into. Note that taxes and fees are still excluded in 7.45%, not sure what is the net after this, maybe ~5+%.

If you are interested, the offer will be available from BPI, BDO, First Metro (investment arm of Metrobank), HSBC., ING Bank Manila, RCBC, SB Capital Investment Corp., and Standard Chartered Bank.

Free Seminar from Citisec

It's a good introduction to investing in the Philippine stock market. It's for people who have minimal or no market experience. Mr. Aya Laraya talked about the current and previous state of our market, how to effectively pick the right company for beginners, the basic techniques and analysis in trading and other information about how to get started in investing in the Philippine Stock Exchange.

The seminar is free, but you need to be registered online. It's held in the 24th floor, East Tower, of the Philippine Stock Exchange (Tektite). The easiest way to get to Tektite is you go to SM Megamall. At the back of Mega B, ride an FX with the Tektite sign and ask the driver to drop you off in Tektite building, the fare is 12 Pesos (as of writing).

Personally, I would suggest it for people who don't have a clue about stocks. The seminar won't teach you the technical stuff of trading, nor stock analysis, it's just an introduction. Mostly, the speaker will talk about making your investment in the stock market as your piggy bank, how to invest safely and steadily by using the technique called Peso-Cost Averaging. More on this on later posts.

Be Careful of Investment Scams

Just heard in the news that people were scammed by Aman Futures Group Phils. Inc. It's similar to double-your-money scams, but this firm promises a guaranteed 15%-40% return of investment and they issue post-dated checks. Even at the minimum 15%, people who really invests know that this guaranteed interest is huge!

Date a guy who invests in the Philippine market

I've been reading a blog trend with the topic "Date a girl who.." so I decided to write a slightly similar version.

Date a guy who invests in the Philippine market
Date a guy who has a passion for investing; a guy with goals, targets and a direction in life. He's a decision maker,  he knows what he wants in life and if he wants you, he wants you for good.

Date a guy who appreciates the value of money. He won't always have the latest gadgets nor constantly treat you in a fancy restaurant, but he dreams of bigger things for the both of you. He plans to give you your dream home where you and your future family will be more than comfortable. When he sees you having a hard time walking when you're in your heels or gets frustrated going to a certain place especially during rainy nights, he'll save and invest for a car for the both of you.

He might not be very good with fashion, but he will be more than happy to take advice from you as long as the price of clothes is within the budget. He knows that the finer things in life need money and he wants to give them to you. He'll be busy making money grow instead of flirting with other girls.

Date a guy who invests in the long term. He understands the bigger picture of your relationship. He knows that there may be bad times, but in the long run you'll still be happy together. He will trust and love you and won't be affected much by jealousy; ok, maybe just a little, but it's just for making lambing :)

Getting started with Stocks Trading (Philippine Market)

My trading account in First Metro has been approved! I can start trading as soon as I fund my account. It requires a minimum of P25,000 to start a First Metro account. If you want to know if investing in stocks is for you, then read on. But before anything else, be sure you're ready to start investing in any kind; you may want to read the "before getting started" entry if you haven't done so.

In my previous post, I talked about Mutual Funds where your money belongs to a bigger collection of fund managed by an expert. Now, if for some reason you feel like you can beat the best fund manager out there, AND you have the TIME to do it then this is for you. You really need to have time to do this, and preferably a reliable internet connection during trading hours (more on this later). It is strongly suggested that you attend seminars before you jump into trading stocks. As for me, I'll take my chances and jump into it right away. Experience is the best teacher anyway; I want to experience it first-hand. I'll also seek guidance from my finance mentor.

Only put money that you are willing to lose, especially when you're just starting (like me).  You need to be financially and emotionally prepared to lose big or in worst case lose it all, and I mean from P25,000 to P0. It is said that trading stocks is like gambling, but it is only gambling to people who don't do research or consume knowledge. As always, you can mitigate risks when you equip yourself with knowledge. On the bright side, the risk is high because the potential to gain is also high.

Let's first define what is a stock. From Investopedia, a stock is a type of security that signifies ownership in a corporation and represents a claim on part of  the corporation's assets and earnings. So in a basic sense, you're buying a part of the company and you become "part owner" of that company. "Part owner" is in quotes because it takes a lot of money to have a major role in a company that you bought stocks from.

Getting started with Mutual Funds in the Philippines

This October, I started investing in First Metro Assets Management Inc. I chose Save and Learn Equity Fund (SALEF); the minimum amount to invest is P5,000.

From the word itself "mutual", meaning it's shared. Mutual Fund is a collection of funds gathered from investors which is then handled by a manager. The manager is called "fund manager". The idea is that you are entrusting your money to a person who is, in most cases, more knowledgeable than you are in investing it to different security options like stocks, bonds, etc.

The advantage of this is that your money belongs to a pool which is big and has a buying power far greater than yours. This means that the investment is diversified and has greater potential to earn more. This is realized more if you don't have a huge amount of money to invest (e.g. you're starting with 5,000 Pesos). Your money is basically riding on the collected funds. Another advantage is you don't have to worry about it minute by minute or even day by day since you're not the one managing the fund.

Before you start investing

If you're a working middle class like me, or a rich kid who doesn't want to depend on your family's wealth, or an employee who has a hard time saving, this is for you. This is a prelude to getting started with investing; like a quick checklist before you put your money where it will work for you.

Many say that business is where the money's at (or "Nasa negosyo ang pera"), and many condescend people who work their ass off to earn money. Being an employee doesn't mean that you can't become a millionaire on your own. Everyone has his or her place, whether you enjoy having a business or you're happy being an employee, it doesn't matter. What matters is that you find contentment in what you do, and you can use your existing income to generate more money.

But before you can be a millionaire, it is wise that you develop a mindset that will increase your success rate towards financial freedom. Let's start with the basics first. The following are the things you may need to contemplate upon before you start putting your money in different investment instruments.

Possible major market rally ahead as of Oct 2012

I'm not 100% sure what it means, but market rally is basically a good thing for investors because prices go up.

By Wikipedia definition of a "rally" in terms of Stock Market:
A rally is a period of sustained increases in the prices of stocks, bonds or indexes. This type of price movement can happen during either a bull or a bear market, when it is known as either a bull market rally or a bear market rally, respectively. However, a rally will generally follow a period of flat or declining prices.

Is Special Deposit Account of BSP safe?

Last week I put some of my money in Bangko Sentral ng Pilipinas' Special Deposit Account (BSP SDA) through BPI. SDA started in 1998. It's a product of BSP aimed to mop excess liquidity in the financial system which is said to be bad for the economy (I haven't dug that deep yet). It offers higher interest rate compared to other low risk investments like time deposit.

The rates now are lower compared to previous years, it seems that BSP is starting to control the in flow of money to this product. Even with the lowered interest rates, it's still much better than any bank's time deposit (TD) and, of course, way better than just putting your unused money in a savings account.

Introduction to Pesobility

This site is still under construction. For now, allow me introduce myself. I'm Manny. As of writing, I'm 27 years old and I'm working as a software developer in the Philippines for 6 years. I enjoyed the money I earned during my first years, mostly spending it to travel, having fun and drinking beer.Now that I'm starting to settle down, I need to be more responsible with my finances. Let's equip ourselves with knowledge and increase financial literacy so instead of working hard for money, you make your money work for you.

I will try to build this website up from research to help fellow Filipinos who are newbies in this area to be more aware that there are resources out there (free and paid) that you can take advantage of in learning how to invest your money wisely.

I got interested in investment because I didn't know about these things before. And now that I know something about, I want to share the knowledge and continue my research. Makes me wonder why these things aren't taught in schools; it should be, it makes people wiser about their money.

To get started, research first about the various investment options available in the Philippines plus their corresponding risks.  There's UITF, Mutual Funds, Stocks, Bonds, etc. Also research why putting all your money into a savings account of a bank is a dead investment.