The Philippine Stock Exchange (PSE) is the corporation that governs our local stock market. People buy or invest in stocks to benefit from a company's tremendous value potential over time. Once you buy or invest into a stock you now become part owner or a shareholder of that particular corporation.
How has the Philippine Stock Market changed over the years?
- The Philippine stock market has undergone a number of reforms and development since the 1990s. These include the unification of two stock exchanges, the demutualization of the Philippine Stock Exchange (PSE), and the enactment of the Securities Regulation Code.
Does the Philippines suffer from high friction costs of equity trading?
- A study involving 12 stock exchanges showed that the Philippines suffered from high friction costs of equity trading. The country was ranked the 5th highest in terms of friction costs among the 12 countries (SEC 2015b). Table 3 shows the total friction costs on secondary trading of equity securities per jurisdiction.
What is the role of stock market in economic development?
- Stock market is an important component of the financial sector in promoting economic development. By reducing the cost of mobilizing savings, the stock market may channel investments into the most productive technologies, therefore leading to economic growth (Greenwood and Smith 1997).
If you buy shares in a company, and the company is profitable, the stock price will likely increase. If the stock price increases, you can then sell the stock on the Philippine Stock Exchange using your BDO Securities brokerage account. You will receive the money you invested in the stock, plus the growth.