For this issue, INVEST TODAY will start giving basic and advanced information on how to invest in stocks listed at the Philippine Stock Exchange (PSE).

The following are the steps on how to invest in the PSE that was taken from the webpage of the PSE on investing (https://www.pse.com.ph/investing-at-pse/)

Step 1: Choose a Broker

Choose a stockbroker. The PSE has a complete list of information about all its trading participants who are authorized and qualified to trade securities for you. This list is also available on the PSE’s website and the telephone directory’s Government and Business listings yellow pages under the category of stock and bond brokers. Aside from representing you in the stock market, a stockbroker can also offer you services such as access to market reports/studies, on-time delivery of important documents, and advise on your investments. It is then important that you trust your stockbroker and that you are satisfied with its services.

Step 2: Open an account

You shall be required to open an account and fill out a Customer Account Information Form and to submit identification papers for verification. The stockbroker will then assign a trader or agent to assist you in either buying or selling any listed security. There are also stockbrokers who have an online trading facility that allows you to post orders by yourself, but sufficient understanding of how the stock market works is key. If you choose to be assisted by a trader or agent, you can discuss with him/her what stocks you want to buy or sell.

Step 3: Give your Order

Give the order to your trader, and then ask for the confirmation receipt. Your buy or sell orders are relayed to the stockbroker’s dealer for execution. In an automated system as in PSE, the order is keyed in through a trading terminal and automatically matched. Confirmation of done trades – via phone, email or online – is made as soon as possible and subsequently, an official confirmation or invoice should be delivered to you.

Step 4: Pay before your settlement date

Pay before settlement date. The delivery or payment should be made before the settlement date of T+3. For traditional stockbrokers, settlement of transactions is usually done after three (3) working days from the transaction date. This means that for transactions done on Monday, as an illustration, payment should be received by Thursday. Meanwhile for online stockbrokers, settlement of all transactions is done on the transaction date. Settlement of accounts is performed by the clearing house.

Step 5: Receive Your Proceeds/Shares

You shall receive from your broker either the proceeds of sale of your stocks (after 3 business days) or proofs of ownership of stocks you bought (confirmation receipt and invoice). If you wish to have a physical certificate of the stocks you bought, you can give instructions to your broker and pay the required upliftment fee. You can purchase shares of stocks either through an initial public offering (IPO) or through the open market (also referred to as the secondary market). Shares sold through IPOs are offered for the first time to the public by the company (primary market) whereby proceeds of the sale go directly to the company. Shares of listed or publicly traded companies are only bought during trading hours. These shares have since been transferred from one owner to another and proceeds of the sales do not go directly to the company but to the owners of the shares.

Visit https://www.pse.com.ph/investing-at-pse/ for more information.