Stop Complaining and Do Something to Improve Your Finances

Stop pointing fingers and be responsible to yourself!

These past few days I’m observing and trying to study how news are written in order to improve my skills and create a more interesting post for my blog. While doing this, I started reading the comments section of each news and I was surprised that 9 out 10 of them are negative expression. These people seem to be full of hatred and disappointment that they are venting it in the comment section. However, one thing is common about their words…they are all blaming and complaining.

If we want to improve ourselves whether spiritually, financially or in other aspect, we need to focus on what can we do for ourselves. Blaming others for our misery will accomplish nothing. It will temporary vent our anger but it will consume us to the point that we can not do more productive things.

Initially, I complain a lot of things and blame other people because I am poor. I hate the government for corrupting that leads to our country dwindling into poverty. I hate the companies who give very little salary. I hate the supermarket because of the inflating prices of consumable goods…Hate, hate, hate…constantly whining because I have no money and feel so miserable. But do my whining leads to improving my financial status? Definitely not.

Then I read the famous poem written by a disable person called “Invictus”…it is also the central theme of the movie by Clint Eastwood with the same title. I copy the most important excerpt and post it in my room and in my office, below is the excerpt:
I am the master of my fate:
I am the captain of my soul

This became one of my official motto in improving my finances. I stop complaining and find ways how to improve my life.
• I have low salary. I find extra job like tutorials. I work hard in my day job and my boss started noticing it and gives me salary increase.
• I have no savings. I started budgeting, did cost-cutting measures and push myself to save.
• I have no knowledge about investing. I do self-study about financial management, stocks, and other investment and I did it without spending.
• I want to have a bountiful future. I started investing and continuously do it.

Everyone has the power to control its own destiny only if they ACT. So if you feel miserable now because of your status, ask yourself what you must do to improve my life. If you find the answer then do it. You may not be able to change the world but you can definitely change your own life.

Jollibee Foods Corp. Review

I miss Jollibee Spaghetti!
Jollibee Foods Corporation or JFC is company whose principal business is the development, operation and franchising of fastfood restaurants in the Philippines and abroad. It was incorporated in Jan, 1978 and has expanded widely since then.

Business Details:
1. Jollibee - the flagship business, is the fastfood chain that  served burger, fries and other trademark products. By the end of 2010, there are 717 Jollibee stores nationwide and 67 stores overseas.
2. Chowking- Chinese fast food chain. As of Dec, 2010, Chowking had 400 domestic stores and 38 international stores.

3. Greenwhich - pizza parlor chain. As of Dec 2010, Greenwhich had 223 stores nationwide.
4. Red Ribbon - pastries and bakeshop. As of Dec 2010, there are 125 branch nationwide.
5. Mang Inasal- newly acquired since Nov 2010 is a fastfood whose main product is grilled chicken and Filipino food. Mang Inasala had 345 stores by end of 2010.
6. Cafe Ti-Amo - coffee and gelato brand originated in Korea. It has 3 stores now.
7. Yonghe King -  fastfood chinese restaurant based in China. As of December 2010, it has 200 stores spread over 21 key cities in China.
8. Hongzhuangyuan - another chain of restaurants in China. It has a total of 52 stores as of 2010.
9. Freemont Foods Corp - a subsidiary which owns and operates the company's Jollibee stores in the Visayas and Mindanao areas.
10. Grandworth Resources Corp - a real estate company which owns or leases some of the properties used as store sites.

Business Perfomance:
The Jollibee Foods Corporation posted an increase in revenue of 11.3% compared to previous years. All brands in all countries contributed to the growth particularly led by those attributed by Yonghe King and Hong Zhuang Yuan in China.
(click to zoom)

The consolidated net income for the year 2010 jump at a 20.5% increase versus the previous year.

However because of the fast rising cost of raw materials and overhead expenses, the 1Q2011 decline by 8.8% from P691.3M to P630.6M.

Note: For reference about ratio and stocks analysis, read here.

ROE = 19.15%
Average ROE for 5 years = 18.88%
OCF/Equity = 31.89%
Net Profit Margin = 6.02

Annual Net Income Growth Rate (5 yrs) = 10.35%

Debt and Risk:
DE Ratio = 24.74%
Current Ratio = 0.99

Though leverage level is healthy, the liquidity level has to be improved since the current ration is below 1.5 which is the considered good level of current ratio.

Dividend Yield (2010) = 2.53%

Recently, JFC distributed dividend at P0.50 per share or a dividend yield of 0.56% based on closing price of P88.5 last May 27, 2011.

Other factors:
It was reported in the news (read here) that JFC increases its interest in US restaurant operator Chow Fun Holdings LLC which is the developer and owner of Jinja Bar and Bistro (a resto chain serving Asian cuisine).  This will contribute to growth in the company in the future.

PE Ratio = 28.73
PB Ratio = 5.35
Intrinsic Value = P101.5/share
Current Price = P88.5/share
Upside = 14.74%

JFC is a very profitable company and it is expected to continuously do so. However, current stock price is already expensive and with the looming inflation rate hike, it is recommended to wait and buy JFC stocks at a margin when level becomes favorable.

Which is the Best Bank in the Philippines for You?

In the previous post entitled "Criteria in Selecting a Bank", the factors that needs to be considered in selecting a bank were mentioned. The first criteria is to choose the most credible bank. In the Philippines, the top 3 banks are Bank of the Philippine Islands(BPI), Banco de Oro Unibank(BDO) and Metrobank(MBT).

Below is the comparison table of the 3 banks to help you choose which banks will suit your needs. All currencies are in Philippine Pesos

Some important things to take note
1. MADB means Minimum Average Daily Balance, which is defined as the sum of the daily end-of-day balances in the account for a month divided by the number of days in that month. The formula for computing for Minimum ADB is below:

2. Dormancy fee is the monthly charge when the account becomes dormant. An account is considered dormant if it became inactive, meaning no financial transaction, for the past 24 months or 2 years.

Monitor Your Expenses To Become Rich

Monitoring expenses is not difficult unless you're lazy!
"You monitor all your expenses? That's too troublesome....I will get crazy if I monitor my expenses," said Billy.

"It's difficult at first but it became easy as I you get used to it....besides it is very important so you can see on things that you can improved in your expenses," I replied.

"Still..doing that is next to impossible. I bought a lot of things in a day, how can you expect me to write them all?"

"Well, that's exactly why you can't save money because you spend too much. You buy a lot of things that maybe some are not needed. Wealth-building is not zero effort." I barked back at him.

This is my discussion with one of my high school friend when he asked me to help him make a financial plan.
He works as an IT consultant in Singapore and his net income is above P250,000 when converted to our currency. Despite having no other mouth to feed (he is single), his credit card debts are huge that I want to slap him a thousand times just to wake up and do something about his lavish lifestyle.

Everybody wants to get rich but majority doesn’t want to make sacrifices and effort to attain it. Like my friend, they update their Facebook status every minute and yet they find it very difficult to jot down the items that they bought. Monitoring expenses is a very powerful tool in managing expenses and wealth as a whole. Below are the advantages of monitoring expenses:

1. It will help you to identify your needs which will be your starting point in making a budget plan.
2. It will make you identify items that are not needed so you can cut them back in your spending.
3. It will make you aware of the items that eats your income and yet you consider as “petty things” (e.g. cigarette, cellphone load, taxi fare and etc).
4. It will make you aware if you’re spending is already exceeding your income which means you’re entering the debt zone.
5. It will make you think twice of buying expensive things.
6. It will help you to reduce your urge to buy since it is troublesome to write it.
7. It will make you stick to your budget so you can save money for investment.

Honestly, monitoring expenses is a little tiresome in the beginning. However, as time goes by, it became a habit for me that I automatically do it. Here’s some tip how to monitor your expenses:
1. Just do it. This is a little effort but you can reap the rewards as your wealth grow
2. Keep those receipts and record it as soon as you have time.
3. Use your gadgets. Almost all people have mobile phones, some are even using smartphones. Guess what, you can record your expenses in the notepad of your cellphones. This will make your recording real time and will prevent you from missing any items.
4. Use spreadsheet. If you have internet connection, the best is to use google spreadsheet. Since it is available online, you can update your expenses table anytime and anywhere for as long as there is internet. If you don’t have internet, MS Excel or Calc is a better alternative. If you don’t have computer, use a small notebook and manually write it. Take note that my mom used only the back of free calendars to write her monthly expenses.
5. Review it every month. Do this so you can evaluate your spending activities and will remind you to stop buying nonsense items and to stick to your plan to get rich.

AEV Company Review

Magat Dam of Aboitiz Power
Aboitiz Equity Ventures, Inc., or AEV is a holding and management company of the Aboitiz group was incorporated in Sept, 1989. To date, AEV is one of the largest conglomerate in the Philippines. The main businesses of AEV are involved in power sector, financial services, food manufacturing, transport and portfolio investments.

Business Details:
1. Power Generation and Distribution
*Aboitiz Power - 76.4% owned, is the main power business of AEV which runs major power generation plants in the country. In addition, AP has ownership interest in 7 distribution utilities in the country namely; VECO (Cebu), Davao Light, SFELAPCO(Pampanga), Cotabato Light, Subic Enerzone Corp, Mactan Enerzone Corporation (Cebu), and Balamban Enerzone Corporation (Cebu).

2. Financial Services
*Union Bank of the Philippines - 40.91% owned, a universal bank
*City Savings Bank - 99.25% owned, a thrift bank based in Cebu City.

3. Food Manufacturing
*Pilmico Foods Corporation - manufacturer of flour
*Pilmico Animal Nutrition Corporation -  swine production and animal feeds business.

4. Other Investments
*Aboitiz Jebsen Group - ship management, manning and crew management, and bulk transport businesses.
*Cebu Praedia Development Corporation - is the real estate arm of AEV which is engaged in leasing of properties in Makati and Cebu.

Business Performance:
For 2010, AEV and subsidiaries posted a consolidated net income of P21.86 billion, a 163% YoY(year-on-year) increase. This impressive operating performance was driven by the robust net income of its subsidiaries particularly of AP.

However, for 1Q-2011, AEV posted a 26% YoY decrease in its consolidated net income. This is mainly due to the decrease in electricity price in WESM and higher cost of coal.  In terms of income contribution, AP is still accountable for the majority at 85%. Banking and food groups are accountable for the 9% and 6% respectively.

Note: For reference about ratio and stocks analysis, read here.

ROE = 42.81%
Average ROE for 5 years = 24.06%
OCF/Equity = 37.73
Net Profit Margin = 39.27

Annual Net Income Growth Rate (5 yrs) = 54.52%

Debt and Risk:
DE Ratio = 129.7%
Current Ratio = 2.36

Dividend Yield (2010) = 1.39%

Recently, AEV distributed divided at P1.58 per share or a dividend yield of 4% based on closing price of P39.10 last May 20, 2011.

Other factors:
It was reported in the news (read here) that AEV will spend P42 billion this year to increase the capacity of its power generation business while P2 billion will be used for its other business. This is a high growth potential for the company.

PE Ratio = 9.87
PB Ratio = 3.36
Intrinsic Value = P83.9/share
Current Price = P39.1/share
Upside = 114.69%

Long term buy is recommended for AEV due to its high growth potential for its active involvement in developing the Power sector of the Philippines.

Investment Philippines Stocks Guide

Please be informed that a Weekly Stocks Guide is included in this site. Just click the "STOCKS GUIDE" on the main panel to view.

Peso Cost Averaging in Philequity Fund, Inc

For introduction to cost averaging, please read the post: Easy Investing Strategy in Mutual Funds or UITF. Last time we see how peso-cost averaging can be applied in investing in First Metro Save and Learn Equity Fund (see post here).  This time we will try to use the same investment strategy in Philequity Fund, Inc.

Philequity Fund Inc. or PEFI is a mutual fund managed by Philequity Management, Inc. with primary objective of capital appreciation by investing the fund in selected Philippine stocks.

Fund Facts
Incorporation Date: 21 Feb 1994
Minimum investment: P5,000
Minimum additional investment: P5,000
Sales Load : 3.5% (decreasing percentage as investment amount increases).
Investment period to wave exit fee: 2 years
Early exit fee: 2% if less than 1 year, 1.5% for more than 1 year but less than 2 years.
Annual Management Fee: 1.5% (included already in daily NAVPS).

Now we will see if using peso-cost averaging will yield a profit in investing in Philequity Fund Inc. Note that the goal of this study is not to prove that peso-cost averaging is the ultimate investment strategy (because no one can as the market is unpredictable). The objective is to see if peso-cost averaging will yield a positive result with less effort but consistent investing.

The mechanics of the investment is as follow:
1. A fixed amount of P5,000 is invested every quarter starting 2001 up to last quarter of 2010.
2. No amount will be withdrawn during the entire period.

In the result shown, if you started investing 10 years ago at P5,000 per quarter (P1667 per month), by now you are more than halfway to become a peso-millionaire...not bad right?

Let us say you can only save P1,000 per month and invest it by the following rule:
1. Save P1,000 per month
2. Every year the accumulated sum will be invested to Philequity Fund, Inc. starting on Jan, 2006 up to Jan 2010.
3. No amount will be divested until end of 2010.

As you can see in the result, even at small amount of P1,000 per month you can have P116,911.73 in 5 years or a gain of P56,911.73.

If you have a child and are planning to prepare for their educational plan, this is a good solution.

My First Financial Mentor is a Welder

It was the peak of winter during February last year, I was with my Korean pal having a session of soju when we saw the newsflash in the television…Greece is in a big mess due to sovereign debt.

My Korean friend prefer to eat simple meals at home
Chasal hajima!(it means “don’t kill yourself” in Korean)”, I jokingly blurted. He had invested heavily in German stocks during that time and I’m quite sure that the entire European Union are affected. He just laughed and say that this is what he is waiting for and explained about the opportunity he saw in this crisis.

This is our typical bonding nights. Our discussions are often about KOSPI, DAX (German Index), Philippine stocks, Chinese policy and etc. We both share the common love of making money through investments. I first met this extraordinary guy in my company where he works as a welder.

Though a blue-collar worker, I’m very surprised by his financial know-hows which he started sharing with me since 2008. He learned about investments during his short stint in Woori Bank as a clerk. Though his temporary position was not renewed, his passion for money-making grew and he started reading books and blogs about personal finances. He teaches me about how not investing is a way to lose money because of the inflation rate which I just ignored before. His investment potfolio consists of bancassurance, exchange traded funds or ETF, German and Korean Stocks and time deposit. I feel ashamed when I first learned about these because he is younger than me and works in a 3D job(dirty, dangerous and difficult) while I work as a design engineer in the same company and my finances are in deep shit(sorry for the word but I can’t find the right adjective).

The following are the things that I've learned from him:

1. Everyone start from scratch.
He said that he also started with huge debt and jobless but this doesn’t prevent him from dreaming big and acting to reach his goal.

2. Education is the key to wealth.
He loves reading books and very passionate about learning (this is one of the common strength of a Korean….I wish all Filipino students are like that as well). Even with scarcity of money, everyone can learn for free if one wants to seek knowledge.

3. Be frugal and save money.
He believes that joy can be derived from simple and inexpensive things (and sometimes free). Sometimes I get criticized by him whenever I became too extravagant.

4. Invest even with a little amount and do it consistently.
He told me a proverb that says “small stones can build churches and tall buildings”. The same holds true for wealth-building. No matter how small, it will grow big overtime.

5. Invest wisely and rationally.
He always research about the companies and he often ignore some market dips which often times are baseless.
Seung while checking stocks in my pc. 

6. Be positive.
“Brother, smile!”. This is his regular words to me. He said that positive aura begets money since when you are happy you feel less needy.

7. Opportunities co-exist with crisis.
This is my most important learnings from him. He encourage me to invest in Philippine stocks in 2009 which I get a juicy profit. He always keeps separate cash which he calls as “crisis reserve fund”. He profit from the panic in Korean market during the sinking of Chonan submarine after North Korea assaulted it, the Middle East and Aftrican Revolution, and he also bought some Japanese ETF after the tsunami incident. He saw the potential in all those calamities and profit from it handsomely.

8. Think long term. 
He believes that even stocks which were bought at expensive price currently can be relatively cheap as the company grow in the future. Some of his stocks were bought 5 years ago and appreciated greatly now but he still keep it.

All of these became an eye-opener to me of the possibilities in creating wealth. He encourage me to invest in Korean stocks as well but I said that I will focus first my investment in the Philippines. In that way I can help our country at the same time. He responded with "Itaas mo!" as we toast our soju glasses. ("Itaas mo" is the only Filipino words that he learned from me in return for his mentoring).

SMPH Company Review (FY 2010 & 1Q2011) Part 2

For Part 1, click this link: SMPH Company Review (FY 2010 & 1Q2011) Part 1.

ROE = 13.33%
Average ROE for 5 years = 14.35%
OCF/Equity = 23.60%
Net Profit Margin = 33.13%

SMPH's consistent profitability is exhibited in its ROE. Net Profit Margin is also very high.

Annual Net Income Growth Rate (5 Yrs.) = 7.63%

SMPH's growth rate is conservative but consistent. Expect further growth in the future as it unfold its new projects being develop. For 2011, aside from SM City Masinag which was open last May 6, the company plans to open SM City San Fernando (40,000 sqm), SM City Olongapo (30,000 sqm) and SM Suzhuo in China (70,000 sqm). Aside from this other development plans were unveiled like SM Cebu South Road Complex and the SM Tianjin in China, among others.

Debt and Risk:
DE Ratio = 97%
Current Ratio = 2.1

SMPH maintains a moderate leverage level despite its continuous expansion these past few years. DE Ratio above 100% is considered risky as mentioned in the post: Definitive Guide to Stock Picking. Current ratio also show a healthy liquidity level to the company.

Dividend Yield (2010) = 2.20%

In 2010, common shareholders received a total dividend of P0.25 per share. Dividend Yield is computed based on the 2010 year end closing price of P11.38 per share.

PE Ratio = 19.86
PB Ratio = 2.74
Intrinsic Value = P15.00/share
Current Share = P11.60/share
Upside = 28.9%

click to zoom

Using discounted cash flow analysis, intrinsic value is calculated based on 2010 Annual Report. Cash flow are expected to grow at 7.63% which is very conservative since its 1Q2011 result is promising at 12.8% increased. Discount rate used is 12% which is based on highest historical Philippine 91-day T-bills rate(10%) plus 2% margin of safety.

SMPH is a good stock to buy as shown in its potential to grow and consistent profitability. Buying it at a margin of safety is recommended. 

SMPH Company Review (FY 2010 & 1Q2011) Part 1

SM Prime Holdings, Inc. or SMPH is a Philipine company whose business is developing and operating modern malls, shopping centers and other related business. The said company was started in January 1964 and had expanded since all over the country and in China. Its main sources of revenues include rental income from leases in mall and food court, cinema ticket sales and amusement income.

Business Details:
SMPH currently has 41 SM Supermalls (SM Masinag is newly opened last May 6, 2011) in the Philippines with a total floor area of 5,078,950 sq meter. SMPH also has 3 malls in China with total floor area of 572, 645 sq.m.

Finding Your Current Financial Status

where are you now in your financial map?
The Philippines have huge malls...some are the biggest among the malls I've been to in Asia. One time while I'm in SM Mall of Asia, I decided to go to National Bookstore to check for books that I can bring with me on my way to Bangkok. After wandering for more than 30 minutes, I've realized that it will take me forever to find the bookstore if I do the "strolling" strategy. Good thing there is a mall map. The first thing I did was find out where am I. It's the first protocol in finding your directions.

The same case in our finances, if we made a goal and wanted to reach it, the first that we must do is to find your current standing. Doing this, we can find what are the things that we must do in order to move forward.

GMA7 Company Review (FY 2010) Part 2

For Part 1, click the link: GMA7 Company Review (FY 2010) Part 1.

ROE= 18.93%
Average ROE for 5 years = 18.37%
OCF/Equity = 25.55%
Net Profit Margin = 22.77%

GMA7's profitability is consistent for the last 5 years as shown in its average ROE. ROE of 15% or higher is considered profitable.

Annal Net Income Growth Rate (5 years) = 8.93%

GMA7 has been doing a lot of things to reinvent its company and investing on the online and digital platform which is the future of television.

GMA7 Company Review (FY 2010) Part 1

GMA Network, Inc. or GMA7 is a media broadcasting company incorporated in June 1950. The company is primarily involved in television and radio broadcasting, the production of programs for domestic and international audiences, and other related businesses.

Business Details:
The following are GMA7's holdings in its principal subsidiaries and affiliates as of Dec. 31, 2010:

1. GMA News Media, Inc. (NMI) - (100% owned) converging technology.

Cost Averaging in First Metro Save and Learn Equity Fund

In the previous post entitled "Easy Investing Strategy in Mutual Funds or UITF", it was mention about using cost averaging technique in investing in equities and funds. Cost averaging is simple investing a fixed amount to the fund at a regular interval.

To know if this strategy is really effective, let us take the case of applying this method of investment in First Metro Save and Learn Equity Fund, Inc or FAMI-SALEF. FAMI-SALEF is the mutual fund managed by the First Metro Asset Management Inc (Metrobank Group) in which the portfolio is invested in selected stocks of listed companies in the Philippines. The fund started in 2005 and is one of the mutual fund in the Philippines that requires a minimum investment amount (initial investment is P5,000 and minimum additional investment is only P1,000).

Easy Investing Strategy in Mutual Funds or UITF

Oh my! I need to try this cost averaging...
If you are a newbie and looking for investment strategies, chances are you will find million of ways and some of them are contradicting each other. So called experts are also preaching technique but most of the time incomprehensible or hard to understand by common people. Because of this a many have the wrong notion that investment are only for the rich and smart. This is not true.

As a solution, Cost Averaging is the best strategy for everyone that will not require rocket science or fancy financial analysis. The concept is simple, you will invest a  fixed amount at a regular interval (monthly, quarterly or annually)on a chosen financial instrument regardless of the price level. The said strategy can be used for stocks investing but this is best applied to Equity Mutual Funds and UITF since this two offers diversification at a  lowest possible investment amount which is suited for everyone.

Definitive Guide to Wealth Building for Common Filipinos

Is it possible for a common Filipino to became wealthy? This is the question that most Filipinos are asking themselves everyday. The answer is a big YES because if other's can then why can't YOU!

There's wealth for everyone in the Philippines
If all people in the world, were ask if they want to become rich, everyone will surely answer "yes" for sure. But only few people will take action so only these few will become wealthy. The formula to wealth building can be summarize in the formula below:
Income - Expenses = Wealth

Very simple yet not everyone can fully understand this equation. To become rich you need to take action and do the following:

1. Increase your INCOME
Everyday, I hear in the news about people complaining about not finding their job and badmouthing the government. There's no question that corruption in our government are rampant but take note that it is not the government that will find a job and work for you to have a salary. It was YOU. The problem with those jobless people are they are so PICKY and LAZY. There's no bad job for as long as it is legal and you will be paid doing it.

If you have a low income job, find additional job (part-time) to supplement or change to a higher paying work. Tip: The best way to land on a good paying job is through EDUCATION and even you don't have money you can earn knowledge.

2. Lower your EXPENSES
To be able to lower your expenses, you need to know your NEEDS. "Needs" are things that you must buy to survive like food, clothes, water, electricity, house and etc. Anything that can be omitted without killing yourself is NON-ESSENTIAL or LUXURY. A branded bag or daily meal in a restaurant is an example of luxury.

If the cost of you needs are higher than your income then you must find a way to increase your income, of course in a legal way. Then, live frugally by cutting on the non-essential expenses. Remeber the formula to be able to build wealth, Expenses should be less than your Income.

3. INVEST your savings
If your income is consistently higher than your expenses, then savings will be accumulated. This is the seed of your wealth. Invest it to grow. The more you save and invest the more your wealth will grow.

Take these action and your dream of becoming rich will definitely come true.

SMC Company Review (FY 2010) Part 2

For Part 1, click this link: SMC Company Review (FY 2010) Part 1.

ROE = 5.35%
Average ROE for 5 years = 10.15%
OCF/Equity = 16.98%
Net Profit Margin = 8.16%

SMC's ROE for 2010 is lower than the accepted profitable level but this doesn't mean that the company is losing money. New assets from acquisitions have expanded the equity thus decreasing the return of equity. Net Income and ROE are expected to pick-up once this new assets starts earning. Net Profit Margin has to be improved as well but high expenses are expected due to their massive diversification.

SMC Company Review (FY 2010) Part 1

San Miguel Corporation or SMC is one of the largest and highly diversified conglomerate in the Philippines. The company is leading in the following businesses: beverage (alcoholic and non-alcoholic), food, packaging, power, fuel and oil. SMC has currently implemented diversification strategy through a series of acquisitions and investments in high growth industry sector like power, fuel and oil, infrastructure, mining, telecommunications, property development and other business outside of its traditional businesses.

A Primer on UITF

One of the main problem I heard about investing in Mutual Fund is the availability of the Investment Company's office in some areas like in some rural areas or provinces outside the metropolis where satellite office are far. Applying to open a Mutual fund  can be done through postal mail but this is troublesome. As an alternative, investing in UITF is the best solution to this problem.
Invest now for a brighter future!

UITF or Unit Investment Trust Fund is like mutual fund (see my post about "Mutual Fund Basics") wherein money from individual investors are pooled and invested in various instruments like stocks, bonds, money markets and other securities. The main difference is while mutual funds are managed by the designated fund manager of the Investment Company, UITFs are handled by the Trust Officers of the Bank.  Both are open-ended funds which means you can add or claim invested money at any time subject to guidelines. Just like the mutual fund, UITF can be classified into 4 main type namely: Equity, Balanced, Bond and Money Market Fund. However, do take note that each fund can be unique depending on the fund's investment objectives.

Criteria in Selecting a Bank

One of the most important aspect in personal finance is banking. Depending on the chosen bank, wealth-building can be easy and optimized if you choose the right bank for you. Below are criteria in choosing a bank:

1. Bank Credibility 
The first and most important criteria in choosing a bank. Why? Since you are going to park your money to the bank so it is only important that the bank is credible and with good historical performance in managing assets.

2. Number of Branches and ATM
People now are more mobile than before and constantly traveling. Choosing a bank with many branches and ATM machines are very convenient to do transaction anywhere. Emergency fund should be kept in the bank with the most number of ATM so that money will be available anytime. Also, this will minimize the chance of transacting using other bank's machine which will cost a lot of withdrawal fee.

SCC - Company Review (FY2010) Part 2

For Part 1 of this review, click the link "SCC - Company Review Part 1"

ROE = 32.04%
Average ROE for 5 years = 19.32%
OCF/Equity = 43.47%
Net Profit Margin = 17.26%

SCC have been a consistent profit-making company as shown in its return of equity with 2010 as its banner year. ROE of 15 or higher is considered profitable (see related post: Definitive Guide to Stock Picking).

SCC - Company Review (FY2010) Part 1

Semirara Mining Corporation or SCC is a coal mining company incorporated in February, 1980 to explore, develop, and mine the coal resources in Semirara Island of Antique. As of end of 1st Quarter 2011, 56.32% of total shares of SCC is owned by DMCI Holdings, Inc.(DMC).

Business Details:
1. Coal Mining - the company generates its main revenues through the production of sub-bituminous coal. In 2010, 57% of the volume of coal products is exported, China is the main custormer (80%). For its power business, 13% of the coal is used. The remaining volume is sold to other power plants, cement plants and other local industries.

From A Million Won to A Million Pesos

This story is from one of my co-OFW here in Korea

"I don't believe is not possible that your salary is only 1Million can't survive with that...never" said Mr. Kim in disbelief when I replied to his question about my monthly salary. I showed to him my payslips and he was shocked. That was in 2007. That year, 1 Million Won, less taxes and deductions, when converted to Philippine Pesos is equal to P48,000. I thought it was a big money before coming to Korea...I was wrong. The cost of expenses in Korea is 3-5 times than in the Philippines, specially food. So in effect, my salary has the same level to a P12,000 income in our country. That was my starting salary in the Philippines after graduation in 2001. At first, I feel bad. It was a miscalculation on my part but it's hard to go back.

Mutual Fund Performance - April, 2011

Below is the performance of the Mutual Funds of the Philippines as of end of April, 2011.

List of Mutual Funds in the Philippines

Looking for a mutual fund to invest in the Philippines? As discussed in the post "Kinds of Mutual Fund in the Philippines", there are currently  four types of mutual funds in our country namely growth or equity fund (sometimes called stock fund), balanced fund, bond fund and money market funds.  

As of Sept., 2010, there are total of 43 mutual funds in the country to choose from:

Definitive Guide to Stock Picking

There are several strategy about stock picking that you can search in the web. Chartist or Traders usually employ Technical Analysis of Daily Price movement while the Fundamentalist or Value Investor uses financial ratios and analyze business performance of the company in picking stocks.

Both these strategies have their strengths and weaknesses although the latter has more rationality. Stock investment is sound if its business-like as mentioned by Benjamin Graham and Warren Buffett. After all, stocks are pieces of a company which is built for business. 

Here are the important steps to choose a good stocks:

1.  Sort the companies according to profitability. 
Ratios like 5-year ROE (Return of Equity), OCF/Equity (Operating Cash Flow to Equity Ratio), and Net Profit Margin (Net Income/Revenue) are useful in assessing the profitability of a company. There are more ratios but  to keep it simple these 3 will do. In order to screen the stocks, all stocks can be listed with the 3 parameters then sort from the highest 5-year ROE  to the lowest.

Metro Pacific Investments Corporation-2010 Performance Review Part 2

For the 1st part of this, click the link "Metro Pacific Investments Corporation-2010 Performance Review Part 1"

ROE  = 4.40%
Average ROE for 5 years = 4.0%
OCF/Equity = 21.73% (operating cash flow to equity ratio)
Net Profit Margin = 28.61%

At first look, MPI seems less profitable since its Return of Equity is only 4.40% (ROE of 15% is good). However, as mentioned in the Business Performance Review in Part 1, MPI have massively accumulating new assets these past few year thus increasing its asset fast while resulting to lower net income (ROE = net income /equities....where equities = assets-liabilites). The operating cash flow to equity ratio speaks the profitability of the company as it shows 21.73%.

Kinds of Mutual Fund in the Philippines

In the post "Mutual Fund Basics", it was mentioned that Mutual Fund is a pool of money collected from investors and invested in various financial instruments. There are four major types of mutual fund in the Philippines where you can invest namely:

1. Growth or Equity Fund - in this type of mutual fund, the money collected is invested on various stocks in the Philippines or the Peso Growth Fund. There are also Dollar Growth Fund wherein the fund managers invested the money in global stocks like in US, Japan and etc. This fund is ideal for those who wanted to invest in the stock market but do not have the time nor the expertise to directly select, monitor, and manage their own stock investments. This type of mutual fund is suitable for investors with an aggressive risk profile. Though high risk, it is also offers high return potential specially in the long run.

Metro Pacific Investments Corporation-2010 Performance Review Part 1

Metro Pacific Investments Corporation or MPI is a holding company incorporated in March,  2006 whose business interest is real estate and infrastructure projects.

Business Details:
1. Tollroads - owned 99.85% of Metro Pacific Tollways Corporation, the concession holder of North Luzon Expressway (NLEX). As of Mar. 3 , 2011, the said company has been waiting for the formalization of turned over of Subic-Clark-Tarlac Expressway(SCTEx). Upcoming project is the NLEx to SLEx Connector Road Project. It also has minority interest in Citra(Skyway).

Related Posts Plugin for WordPress, Blogger...