Hi, my name is Koi. I'm new to the forum and I'm interested in trading on the Philippine Stock Exchange. I am based in the US, however, so trading here is an option as well. I was wondering which if it would be beneficial to trade in a newer exchange, like the PSE, with a smaller market, or to trade in the NYSE, etc.. If anyone has had experience trading in both markets, which would generally be good for a novice trader like me? Thanks in advance!
Thanks for the response. Can you go into detail the about the spreads and commisions? I know that one of the brokers in the philippines charge .25% commission on gross but am not sure how that compares to the US. That same broker also charges about $0.50 per trade minimum, which I think is good. Then again, I know nothing lol
The economy is not that diversified (nor is it uncorrelated to the US economy) and the action is limited to a few key names. Buy San Miguel and you have yourself an index fund. Insider trading information is maintained by long standing network that spans several generations. Additionally, the only consistent was of wealth preservation due to currency devaluations has been to own land. Perhaps, you can buy Ayala Land as well and call it a day.
Prices for stock trading in the philippines are ridiculous compared with the US. I just had a look on the website of one of the most recommend brokers: https://www.colfinancial.com/ape/Final2/home/faqs_main.asp#trading_and_handling_fees Overall you pay 0.70% of the traded value for a round-turn. 0.70% !! if you buy 10,000 USD worth of stocks in the philippines, you pay 70 USD in commission. You got to earn that much before to make any profit! In the US I pay next to nothing (currently 0.005 USD a share), so if I buy an index ETF like QQQ for 10,000 USD I pay 0,50 USD in commission. FEE AMOUNT REMARKS Commission .25% Of the Gross Trade Amount Value Add Tax (VAT) 12% Of Commission Philippine Stock Exchange Transaction Fee (PSE Trans Fee) .005% Of the Gross Trade Amount Securities Clearing Corporation of the Philippines Fee (SCCP) .01% Of Gross Trade Amount ADDITIONAL FEE FOR SELLING Sales Tax No. of Shares x Price x .005
But that only affects trading. If you want to invest (!) and just buy and hold shares => go ahead. 0,70% is ok. And don't forget the time difference to the Philippines; trading there you'll need to stay up long time.
I really appreciate your inputs guys. I think it's because I don't know the brokers most traders use to trade in the US that I thought trading in the PSE was cheap. I'm happy that i know a bit more now! So I'm curious what brokers do you guys use when trading in the US? Also, would trading still be a worthwhile endeavor even after the fact that I hear it's mostly computers doing the trades already? How do I compete with that? The reason I considered the PSE was because I currently live in the US but I grew up in the Philippines so I know most of the companies there. The way I saw it, I get to work full time (like a 9-5 job), get off work, rest for a bit, then trade when the PSE opens (around 6:30pm US time), then rinse and repeat. I'm young (early 20s) so I dont mind losing a few hours of sleep, and trading would be a flexible source of extra income so that in case I need to do some extra after-hours work for my fulltime job, I won't be constricted by a second job. I recently graduated with an Economics/Finance degree so trading obviously appealed to me because it was about things that I found interesting, numbers and money (not that I want a lot of it, just money in general lol). Sorry if that was a long read, I'm not a very good writer hehe. Anyways, given that about me, what would you guys advise me to do? Should I just do US markets? Look into another market with the same local time as the PSE? I look forward to hearing from you and thanks again!
A major tenant of trading is trading where the opportunity presents itself. If you want to trade during those hours you trade the Nikkei or various others on SGX or HKFE. Note: I'm talking about futures not equities. Even if you think you know the companies or are familiar with Philippine companies you don't know the inside information or various other intangibles that will make it a lousy opportunity compared to other markets.
I could wax and wane about this, but this is my final try. There's not enough liquid names to trade. You will find yourself staring at the screen when there is no action or taking action when you shouldn't. You will stunt your development as a trader.
I realize my comment is a bit off-topic as it's not about trading but I felt it needed to be mentioned. I'm in the Philippines and judging from the optimism of average investors here, there is definitely a bubble going on. Real estate wise, I've been to subdivisions where 90% of the houses have been vacant for over a year. The new skyscrapers have apartments that few filipinos who work locally can afford. There are also a ridiculous amount of people investing in stocks that really don't have a clue about what they're doing. They treat the market as an ATM basically, thinking that earning 10% a month is normal. Basically every other person I come across here is either investing in stocks or wanting to invest in stocks, that to me is a warning sign. I won't even talk about the various investment schemes/scams that pander to foreign Filipino workers (they have more cash to spend).