Philippine (& ASEAN) Stocks

were Affected by US Economy

Investor:

searching,

where to

invest…

Low price, good potential

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One day, exam

4 weekends seminar

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One day, exam

24 weeks, classes

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Good Fundamentals

Story 1

Economic CYCLE

1997

2004 2008

SECOND- LARGEST

Tokyo

Investors’ Money may Flow to ASEAN & to Philippines

London

New York

LARGEST ECONOMY & CAPITAL MARKET

THIRD- LARGEST

GDP: 1%

GDP:

1%

GDP: 1%

GDP:

6%

Trough

Expansion

Peak

Recession

When should you buy stocks?

Bonds Economic Cycle of the country

Bonds

Trough

Expansion

Peak

Recession When should you buy stocks?

Bonds Economic Cycle of the country

Bonds

January 2013 December

2013

It was a

“SPIKE UP”

Possible

Path ? till

December

6780

17%

5800

TOO SOON !

7300

Now

Grew 19% a year, SINCE 2002

IF 19% a year, FROM NOW ON

BY

2018

14,318

“Fundamental” Vs. “Technical”

12

Fundamental Analysis

Financials & Economics

Technical Analysis

• Trends (to continue?)

• Turning points (reversals)

Sales

– Costs

= Net profits

Earnings

per

Share

Stock Price versus

Company VALUE

Past prices

vs Future prices

What do you mean, by good

fundamentals for investments.

Investments can mean any

form of activity to make money

grow.

For example, real investments

are “start a business” or “buy

& develop real estate.”

Story 2

Investments can also mean

stocks and bonds. Since they

can be easily sold and bought,

they are called LIQUID.

Any investment that is hard to

sell, and hard to buy, is called

ILLIQUID.

Story 3

The economy is growing

because of higher ...

• consumer spending

• private sector investment

• exports- imports

• government spending &

government construction

activity.

Story 4.

So how will it affect us, here, if “the

economy is growing.” It means that

there will be ...

• Lower interest rates for business

loans

• There will be more capital available

for new business

• There will be more jobs for finance

professionals.

4

So how will it affect the average person, if the fundamentals are good. Answer:

• Government budget is increased: • Higher spending for social welfare,

and health for the poor. • Higher budget for public schools. • Higher spending on roads. Better for

travelling to go to work.

• There will be more opportunities for those who work hard, to get good jobs, or to start their own business.

5

How will we, be

affected by USA

economic trends...

ano ba yung

“Tapering” of

“Quantitative Easing” ?

6

0%

US $

IF U.S. Economy...

“I think, I

MIGHT

STOP...

Q-E”

IF...?

grow-

ing

fast?

1%

? MAY 2013:

Bonds!

Stocks!

Overheating:

inflation

Depression:

No Jobs

“Cool OFF” the Overheating

“Stimulate” to

ward off Depression

“Cool OFF” the Overheating

“Stimulate” to

ward off Depression

Two ways to stimulate the economy:

1. Government spends 2. Lower... interest rates

“Stimulate” to

ward off Depression

Government spends, to “prime

the pump”

Lower Interest

Rates

“Stimulate” to

ward off Depression

Government spends, to “prime

the pump”

Lower Interest

Rates

“Quantitative Easing”

… “Q.E.”

0%

US $

IF U.S. Economy...

“I think, I

MIGHT

STOP...

Q-E”

IF...?

grow-

ing

fast?

1%

? May 2013:

Bonds!

Stocks!

ASIA

USA

US $

US $

Dollars “FLED” to the Mainland USA

ASIA

USA

US $

Asian Markets

FELL

0%

US $

IF U.S. Economy...

“I will

continue

Q-E”

NOT

grow-

ing

fast

1%

? SEP 2013:

Bonds!

JOBS