Q&A: Choosing between COL or BPI Trade online broker

Hazel says

Good day! Your blog was very informative regarding your stock recommendations. I'm a newbie when it comes to the stock market. I'm planning to invest in stocks but still don' t know if i'll choose col or bpi trade.

Hi Hazel, thank you for visiting. For your first question, you can also consider First Metro (under Metrobank). This is my broker and so far I have no complains about it. If you're really choosing between BPI Trade and COL, I would suggest to choose COL in general. I have officemates who use COL and BPI Trade, and BPI Trade tends to have a lot of down time since it's a very old system, and many times you might get frustrated like my officemate.

But I'll tell you two reasons why you would consider BPI Trade, and these are deciding factors for some, especially those who have a lot of money:

1. The cash you don't use in stocks earns interest (same as a normal savings deposit). This is a great convenience, but it's only useful if you have a lot of money, like at least 5M, and you actively trade your stocks. For example, there are times that you sell all or a big chunk of your portfolio, probably because you feel that the stock is already overvalued or there's a crisis. During this time, the money is just parked in your account. Parked money in First Metro and COL accounts, AFAIK, do not earn interest, but BPI Trade does. So if you have 5M parked in your account, you'll probably earn around 4,000+ Pesos per quarter (rough estimate). Not bad.. can be used to buy groceries.

2. Odd Lot Trades do not impose the minimum P20 commission rate. There are fees when you trade stocks, it's usually 0.25% or P20 whichever is higher. If you're not familiar with odd lots, it's simply the trades below the minimum unit of trading. For some who's into odd lot trading, this is a great advantage, but for usual people, this is not that useful.

The above two are the advantages of BPI trade over the others, but I'm guessing you won't be needing them that's why I would suggest COL or First Metro in your case.

For your financial questions, feel free to email me at manny@pesobility.com and I will try to answer them as soon as I can.

Reminder: GTCAP and LTG will replace MER and BEL in PSEi on Sept 16

After On September 16 trading day, GT Capital Holdings, Inc. (GTCAP) and Lucio Tan Group, Inc. (LTG) will join the list of Blue Chips in the Philippines or the top 30 companies that composes the Philippine Stock Exchange Index (PSEi).

In a statement by Phil. Stock Exchange president Hans Sicat, he said that this is a result of a regular assessment of the main index to reflect the current market of the Philippines.

Manila Electric Company (MER) and Belle Company (BEL) will be kicked out (harsh term) of the index so you may expect a bit of temporary selling pressure; it's possible that it may be overly done in which case, it's a possible opportunity buy because even if they were removed from the index, their business and management remain the same.

In my personal opinion, I don't get why newly created corporations such as LTG and BLOOM got "indexed". Yes, they seem reputable, but shouldn't PSE give them the chance to prove themselves first and create a good track record? I mean compared to Jollibee Foods Corporation which has been here since the 70's, LTG and BLOOM are babies. Anyway, they seem to be well-managed so most likely their businesses will do good; plus they are right on the spot in terms of liquidity, market capitalization, and free float level (criteria of being in the Philippine Stock Market Index).

Mark the date: September 16, 2013. Happy trading!

The biggest PSEi drop in recent history, what happened?

It has been a bloody market today. The stock market dives to 6,114.08 or -6.75%, the largest drop since 2008. Why is this happening despite our emerging economy?

To explain this, we have to look what's happening outside the Philippines:

Japan's Stock Market Plunge 

Japan contributes largely to the worries in the Asian financial market. Nikkei is down by more than 6 percent  today. The drop is among the many we've seen in the past few weeks which ultimately caused Japan to officially enter the bear market. Everyone is cautious on what's may happen next.

The quantitative easing of its central bank is backfiring, plus other global economic worries (below) also factor in.

U.S. Fed to Lessen QE 

Quantitative easing (QE) is a solution that the U.S. government devised to save its economy from crashing. It does that by buying billions worth of bonds each month in order to stop the prices from free-falling. This was proven effective in the short period it was established, but now, the market seems to be dependent on govt's stimulus. There's a lot of uncertainty what will happen when the govt stops quantitative easing. This uncertainty breeds fear, which in turn, drives the stock market down. And when the U.S. stock market falls in this global economy, everyone also falls.

China's Economy is Slowing Down 

China is the industry engine of the world, almost everything is made in China. When China reports that its economy is slowing down, it reflects that the global demand is slowing down which again invokes fear and uncertainty.


There are a lot of uncertainties in the global market, not to mention the economic problems in Europe. These uncertainties multiplies the effect in our stock market today triggering a major sell-off. Closely monitor what happens to Japan, U.S. and China and you'll have an idea what will happen to the global financial economy and how it will affect the Philippine stock market.

I believe we area nearing a global financial catastrophe if this continues and if there are no positive news to impact the market. Fortunately for the Philippines, we may still have an ace card: MOODY's upgrade rating which is expected soon, will it trigger a reversal from our market slump?

What is to be done during these times

The problem is no one knows how low it'll get. There are some signs to look for like when the market stops plunging and moves sideways. The good thing is the market phases do not usually happen in one day so you'll have time to react.

Market Emotion

So where do you think are we? Probably between "Fear" and "I'm out"?  

The market is very volatile, during this time, investors protect their money by liquidating them (to avoid the effects of further depreciation). People withdraw their investments from mutual funds, uitf, stock market etc. This has an adverse effect on the stock market because it will drive stock prices down, which is currently what's happening, locally and abroad. The net foreign sell (NFS) in our stock market is huge in the past few weeks.

But again, no one knows how low we'll reach. Are we at the lowest point this year? If we are then it's a great opportunity to buy, if we're not then it's time liquidate. We'll see :)

Deadly Speculation on AGI companies $SUN $MEG $GERI $ELI

[See Aug 14, 2013 update at the end of this post]

Disclaimer: Speculation is the mother of all evil so act at your own risk. The statements below are purely speculative.


In quick summary: My speculation is Alliance Global Inc. (AGI) properties would be merged into one, the surviving entity will probably be Megaworld Corp. (MEG). Suntrust (SUN) will be left as a shell company for a more profitable venture (to be backdoored, Emperador? Travellers? Dunno).

AGI will hit two birds with one stone if it were to do this. SM already did it, merged its property units to SM Prime (SMPH), which will make SMPH larger than Ayala Land (ALI). To be competitive, AGI may need to do the same with its property units Global-Estate Resorts (GERI), Empire East (ELI) and Suntrust (SUN). In the merger, ELI and GERI will benefit from this (much like what happened to SMDC and HP). SUN already sold its property stake to MEG, which spurred speculations (SUN's share price up by 30%-40% today).

So why not just merge SUN with the others. It may mean AGI has bigger plans for SUN. There was a rumor before that Travellers International (Part owner of Resort's Word) will use SUN as a backdoor which lead to SUN's price to shoot up, but the rumor was silenced when AGI disclosed that Travellers Group filed for its IPO (means it won't use a backdoor listing).

Now, SUN is more or less a shell company when it sold its property stake to MEG. What is the purpose of this? Could be used as a backdoor for Emperador? Or maybe Travellers changed its mind? But in any case, the speculation is that it's highly probable, SUN will be used as a backdoor for another company.

[Update Aug 14, 2013] Seems the speculation above is coming to life. AGI announced property mergers, CHECK! SUN was left as a shell company, CHECK! And now, SUN just released a disclosure that allows existing shareholders to buy additional 2.5 shares at P1.0.

This clearly indicates a backdoor is brewing. Why? If you have a shell company, a company without assets, why would you conduct a stock rights offering. It means there is a motive to revive this shell company ito a profitable venture. The question, again, is who will it be? Emperador? Nobody knows yet since it's not included in the disclosure, which means more speculation and hype!

If you can buy SUN below P1.00 it MIGHT be a good buy, but I doubt you will be able to buy shares below P1.00 (if people know the value of their existing shares)

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.

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.

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.