02 economic fundamentals college students _09 20
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Philippine (& ASEAN) Stocks
were Affected by US Economy
Investor:
searching,
where to
invest…
Low price, good potential
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Certified Securities Representative
2 hours exam
3 days seminar
P6,000
Registered Financial Planner
One day, exam
4 weekends seminar
P35,000
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Certified Securities Specialist
One day, exam
24 weeks, classes
P60,000
Chartered Financial Analyst
One exam per year, 3 years
Self-Study, six months per year, for 3 years
$1200/ exam
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Good Fundamentals
Story 1
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Economic CYCLE
1997
2004 2008
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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%
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Trough
Expansion
Peak
Recession
When should you buy stocks?
Bonds Economic Cycle of the country
Bonds
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Trough
Expansion
Peak
Recession When should you buy stocks?
Bonds Economic Cycle of the country
Bonds
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January 2013 December
2013
It was a
“SPIKE UP”
Possible
Path ? till
December
6780
17%
5800
TOO SOON !
7300
Now
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Grew 19% a year, SINCE 2002
IF 19% a year, FROM NOW ON
BY
2018
14,318
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“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
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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
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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.
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Story 3
The economy is growing
because of higher ...
• consumer spending
• private sector investment
• exports- imports
• government spending &
government construction
activity.
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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
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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
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How will we, be
affected by USA
economic trends...
ano ba yung
“Tapering” of
“Quantitative Easing” ?
6
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0%
US $
IF U.S. Economy...
“I think, I
MIGHT
STOP...
Q-E”
IF...?
grow-
ing
fast?
1%
? MAY 2013:
Bonds!
Stocks!
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Overheating:
inflation
Depression:
No Jobs
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“Cool OFF” the Overheating
“Stimulate” to
ward off Depression
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“Cool OFF” the Overheating
“Stimulate” to
ward off Depression
Two ways to stimulate the economy:
1. Government spends 2. Lower... interest rates
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“Stimulate” to
ward off Depression
Government spends, to “prime
the pump”
Lower Interest
Rates
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“Stimulate” to
ward off Depression
Government spends, to “prime
the pump”
Lower Interest
Rates
“Quantitative Easing”
… “Q.E.”
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0%
US $
IF U.S. Economy...
“I think, I
MIGHT
STOP...
Q-E”
IF...?
grow-
ing
fast?
1%
? May 2013:
Bonds!
Stocks!
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ASIA
USA
US $
US $
Dollars “FLED” to the Mainland USA
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ASIA
USA
US $
Asian Markets
FELL
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0%
US $
IF U.S. Economy...
“I will
continue
Q-E”
NOT
grow-
ing
fast
1%
? SEP 2013:
Bonds!
JOBS
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