Stock represents a claim on the company’s assets and earnings, while the stock market is where you can buy, sell, and trade stocks. The Philippine Stock Exchange (PSE) is the corporation that regulates our local stock market to ensure a fair, efficient, transparent and orderly market for buying and selling of securities.
PSE Trading Hours/ Market Phases:
How to Invest?
Investing Procedure (PSE):
1. Choose a stockbroker. The PSE has a complete list of information about all its trading participants who are authorized and qualified to trade securities for you.
This list is also available on the PSE’s website and the telephone directory’s Government and Business listings yellow pages under the category of stock and bond brokers. Aside from representing you in the stock market, a stockbroker can also offer you services such as access to market reports/studies, on-time delivery of important documents, and advise on your investments.
It is then important that you trust your stockbroker and that you are satisfied with its services. Click here for the list of Online Brokers.
2. You shall be required to open an account and fill out a Customer Account Information Form and to submit identification papers for verification.
The stockbroker will then assign a trader or agent to assist you in either buying or selling any listed security. There are also stockbrokers who have an online trading facility that allows you to post orders by yourself, but sufficient understanding of how the stock market works is key.
If you choose to be assisted by a trader or agent, you can discuss with him/her what stocks you want to buy or sell.
3. Give the order to your trader, and then ask for the confirmation receipt. Your buy or sell orders are relayed to the stockbroker’s dealer for execution.
In an automated system as in PSE, the order is keyed in through a trading terminal for matching. Confirmation of done trades – via phone, email or online – an official confirmation or invoice should be delivered to you via courier (Traditional) or email (Online).
4. For Traditional Account, pay before the settlement date.The delivery or payment should be made before the settlement date of T+3. Settlement of transactions is usually done after three (3) working days from the transaction date.
This means that for transactions done on Monday, as an illustration, payment should be received by Thursday. Meanwhile, for Online Account, it must be pre-funded in order to buy securities. Settlement of shares is performed by the clearinghouse.
5. You shall receive from your broker either the proceeds of the sale of your stocks (after 3 business days) or proofs of ownership of stocks you bought (confirmation receipt and invoice).
If you wish to have a physical certificate of the stocks you bought, you can give instructions to your broker and pay the required upliftment fee.
You can purchase shares of stocks either through an Initial Public Offering (IPO) or through the open market (also referred to as the secondary market).
Shares sold through IPOs are offered for the first time to the public by the company (primary market) whereby proceeds of the sale go directly to the company. Shares of listed or publicly traded companies are only bought during trading hours.
These shares have since been transferred from one owner to another and proceeds of the sales do not go directly to the company but to the owners of the shares.
Click here to know more about HDI Securities.