Know the Language of Investment in PSE Part 1

The Philippine Stock Exchange or PSE is the private organization that operates the stock market wherein people can invest (buy and sell) in the publicly listed companies in the Philippines. The website of the Philippine Stock Exchange contains a lot of information that is valuable for every investor. Examples are company reports (e.g. financial statements), stock market update, company disclosure or announcements and etc.  Below is a screen capture of the said website:

As a prerequisite, it is important to know the jargons or words use in the Philippine Stock Exchange.
1. Ticker Symbol, Symbol or Ticker - is the nickname of the listed companies. In the above picture, First Philippine Holdings Corporation's ticker is FPH.  (Trivia: GMA7 or GMA Network, Inc  is the only listed company in PSE with numerical number on its ticker). To look for the listed company in the PSE website, type the ticker symbol in the form located in the upper right hand corner of the site.

2. Listed Shares and Outstanding Shares -Listed Shares is the total shares or stocks issued including those stocks repurchased by the company (company buy back) while Outstanding Shares is the number of stocks currently being held by the investors and is the most important in valuation of stocks.

3. Free Float Level - is the percentage of a company's outstanding shares that are not held by strategic shareholders. The higher the free float level, the more liquid is the stocks and the higher its turn-over that's why short-term traders prefer stocks with high free float level. Currently, PSE imposed the 10% minimum free float level to all stocks.

4. Board Lot- is the multiple of minimum shares that can be bought depending on the stock price. See below:
For example, FPH's last price, 63.5, falls under the 50-99.95 range and so the lot size is 10 which means stocks can be bought at multiples of 10 (10,20, 30 and etc.).

5. EPS or Earnings Per Share - this is the portion of net income allocated to each outstanding share.

6. PE Ratio - literally it means price to earnings ratio. It's a quick parameter to tell if a stock is expensive or not. As per literature, high PE ratio of 20 or above means the stock is expensive while below 10 means the stock is cheap. A caveat: high PE ratio doesn't always mean expensive stocks specially for the case of growth stocks or those companies that are expanding fast and low PE ratio may sometimes mean the company condition is not good and so no one wants to buy it.  It is important not only to look at the number but also on the story behind it.

7. 52 week high - the highest price for the last 52 weeks (trivia: there are 52 weeks in a year).

8. 52 week low - the lowest price for the last 52 weeks.

9. Order - when you buy or sell stocks, you place a so-called order.

10. Bid Price and  Volume - price and volume(number of shares) order of the buyers.

11. Offer Price and Volume - price and volume order of the sellers.

12. Marched Order - when buyers price and volume have a corresponding seller, then we have a matched order and the transaction is done.

For Part 2, click this link "Know the Language of Investment in PSE Part 2".

Related Posts Plugin for WordPress, Blogger...