Current Stock Market Woes

The past few months have been nothing short but spectacular for the Philippine stock exchange that has reached new highs and made a lot of stockbrokers and stock traders millionaires. With one IPO released after another, one would think that the good times would never end. But then as fate would have it, the US sub-prime mortgage problem has hit home and practically wiped out gains of the composite index in the past two months. The US home loan concern is further aggravated when the lending firm American Home Mortgage Investment Cop. (AMH) shares plunged 90% of it’s value leaving anyone still left holding this hot potato a very big migraine. Is the Bull Run over? The recent drop in the PSE has turned investors to consider fundamentally strong stocks in favor of quick gain speculative stocks.

A lot of recent IPO’s like Aboitiz power and Vista land has been a really big disappointment for small investors like me as those stocks are now trading below their Initial offering price even before the US sub-prime problem had hit us. But for those waiting a chance to get into the action are now very much in the position to do so since these IPO’s are now very attractively priced and previous IPO’s like Alliance global are now also trading below initial offer price. The only bright spot in all of this is that the GMA IPO performed very well and bucked the downward trend, and despite the controversy regarding the claim made by Imee Marcos.

Although it is still too early to tell if the market has turned bearish. Most investors are now waiting in the sidelines to see what will happen in the coming days before going right back in when the storm has passes. What happens in America will always have an effect on our stock market. But I believe that our economic fundamentals are strong enough not to be dragged down and I a m looking forward in recouping our losses soon.

Philippine Stock Market IPO

IPO or Initial Public Offering is what a company does when it decides to open themselves to the public for the first time by offering stocks and getting listed in the Philippine Stock Exchange. This is great way to infuse huge amounts of money into the company that can be used for further expansions. A lot of companies are taking advantage in the current stock boom which has already reached historic highs by going public. This presents itself as an incredible opportunity for investors to earn by scrambling over every IPO that is being offered in the market. With recent success stories like Pacific Online and Phoenix Petroleum whose stock value on the first listing day posted double digit gains, it's no wonder that IPO's are highly sought after and often are many times oversubscribed.

With the almost guarantee of earning from IPO's there has to be a catch right? One of the biggest problems for the investor even if they have millions of pesos to burn is getting the desired number of stocks during the IPO will prove to be difficult as most brokers, both online and off line will only allocate you a portion of your order, most of the time the minimum or board lot will be given to you unless you are a really big client. Some people I know would use the names, personal information and TIN numbers of their friends and relatives to buy IPO so they could be allocated a bigger share. But even if you are a big shot, one of this years most highly anticipated IPO, GMA 7 will only allocated a maximum of 1,000 shares per person and would require a personal appearance before they process your application.

But not all IPO's can sustain their gains and some even go lower than the initial IPO price. Take for example the recent offering of Aboitiz Power Corporation (AP) whose IPO price was 5.80 pesos but it's currently, as of writing 5.50 pesos. This stock managed to go as high as 6.20 pesos on the first trading day which is really not bad but no where near double digit gains. If you have sold you shares at that time you would still have made a profit. But guessing when the stock price will hit the ceiling or bottom out is the tricky part of stock trading. They trick is not to be greedy by holding on to the stock in the hope of winning it big only to be disappointed when the bubble bursts.

The Joys Of Online Stock Trading

Before I started buying stocks online, I have quite a few misconceptions about the nature of the stock market like its more of a gamble than an investment, but now I know there is more to it than just randomly investing and just hope for the best as it requires lots of research and charting. It is intimidating for someone like me with no knowledge of how to trade where to start, how to pick stocks to invest in and where to find a broker. Fortunately for me, a friend introduced me to stock trading online and I was immediately hooked due to the ease of buying and selling stocks coupled with the lowest fee outside of a traditional broker which is only 0.25% or 20 pesos whichever is higher.

Two of our country's online stock brokers are CitisecOnline (https://www.citiseconline.com) and Philstocks (https://www.philstocks.ph) can start trading stocks right away for as low as 5,000 pesos for Philstocks and 25,000 for CitisecOnline. Funding is relatively easy via bank deposit or online fund transfers. CitisecOnline also provides financing for blue chips stocks up to twice your current buying power. For those who are already trading stocks the traditional way, diversifying into online trading will make a great addition to your investment portfolio and spread your risks. I highly recommend signing up for their free tour to familiarize yourself with stock trading.

Once you have signed up, even if you are totally clueless on where to begin, there are basic guides on where to start and lots of information available at their website to turn you into a savvy stock trader. There are Fundamental and Technical research guides on which recommended stocks to buy which is basically like having your personal investment advisor. You are basically responsible for you account so you have full access and control unlike traditional brokers who you have to call up and constantly monitor to buy or sell at your desired amount, which unless you are a big client will be unlikely as they will of course take care of their bread and butter clients.