COL Financial New Bank Fees

COL Financial have successfully negotiated with BDO and BPI to waive certain deposit charges when funding your COL account.

The new bank fees for the use of the deposit facilities of BDO and BPI effective July 1, 2017 are summarized below:

For us OFWs, this is good news for us because we normally do our banking transactions online. 

Shell Files for Largest IPO in Philippines

Company Information
Shell is a global group of energy and petrochemicals companies with around 93,000 employees in more than 70 countries and territories. Its headquarters is in The Hague, the Netherlands. The parent company of the Shell group is Royal Dutch Shell PLC, which is incorporated in England and Wales.

Pilipinas Shell Petroleum Corporation (PSPC) refines, blends, transports and sells a wide range of high quality fuels, lubricants, bitumen and other specialty oil-based products. It operates a refinery with a rated capacity of approximately 110,000 bpd and over 960 retail stations nationwide. 

Pilipinas Shell commenced operations of its first crude distiller in Tabangao, Batangas in 1962 (now an oil refinery since 1994). Shell also opened a refrigerated LPG terminal in 1983, the first of its kind in Asia operated by Shell Gas Eastern, Inc. with trading handled in the region by Shell Gas Trading Asia Pacific.

It's headquarters is in Makati City and employs more than 3,000 employees nationwide.

Republic Act No. 8479 (An Act Deregulating The Downstream Oil Industry And For Other Purposes)
According to RA No. 8479, Chapter 7, Section 22,.an oil refinery company shall offer at least 10% of its shares to the public.

Below is the full text of Section 22.

Sec. 22.     Initial Public Offering. – In compliance with the constitutional mandate to encourage private enterprises to broaden their base of ownership and in recognition of the vital role of oil in the national economy, any person or entity engaged in the oil refinery business shall make a public offering through the stock exchange of at least ten percent (10%) of its common stock within a period of three (3) years from the effectivity of this Act or the commencement of its refinery operations: Provided, That no single person or entity shall be allowed to own more than five percent (5%) of the stock offering: Provided, further, That any crude oil refining company and any stockholder thereof shall not acquire, directly or indirectly, any share of stock offered by any other crude oil refining company pursuant to his Section: Provided, finally, That any such company which made the requisite public offering before the effectivity of this Act shall be exempted from the requirement.

Delayed Listing
The law was enacted last February 1998 and according to the law, oil refinery companies must make a public offering within three years from the effectivity of the law. Supposedly last February 2001, Pilipinas Shell should be listed in stock exchange but it never happened due to unfavourable market conditions and the need for refinery upgrades. Instead, Shell filed for IPO only this year. 

Caltex should follow suit soon with the current market conditions.

Largest IPO Ever
If the company would go for the maximum amount of shares at the maximum price, it would be the biggest stock market debut in the Philippine Stock Exchange at P29.7 billion worth of shares.  It can potentially exceed the sizes of the largest IPOs so far seen in the country.

Robinsons Retail Holdings Inc.  raised P28.11 in 2013.
SM Investments Corp.  raised P26.25 billion in 2005.
Cemex Holdings Philippines Inc. raised P25.1B in 2016.

Cebu Pacific’s IPO raised P23.3 billion in 2010.

LTG Group Inc. raised P37.72 billion in 2013. Technically, LTG’s exercise was a re-IPO or a follow-on offering after the group infused key businesses in what used to be a purely liquor company, Tanduay Holdings.

IPO Offerings Details
Price: P90 per share

Global coordinator and international book runner: JP Morgan
Domestic lead underwriter and domestic bookrunner: BPI Capital Corp.
Financial adviser: Rothschild

IPO Shares Composition: 
69% for offshore institutional investors
30% for local trading participants and small investors
1% for its employees.

Secondary shares: 270 million 
Primary shares: 30 million
Over allotment shares: 30 million shares

18.6% of post IPO shares

Use of Proceeds: fund capital expenditure, working capital and general corporate expenses

Financial Statements
Once the financial statements are available, we will post them accordingly. It's too early to tell whether the IPO is fairly priced or priced with a hefty premium. It should not go far beyond the valuation of Petron and its regional peers.

85% of the Investors Lose Money

Recently, I was browsing the website of an investment related company and come across an article penned by an investment advisor. He is advising investors to be cautious about the recent stock market rally. Another click, another advisor advices the public to be optimistic on the current rally.

The noise are everywhere…

Do you know that 85% of the professionals in the stock market lose their money by the end of the bull bear market cycle? Only 15% are able to get out of it with their heads intact. So, if 85% of professional were losing money in the stock market, how would a beginner or someone with zero knowledge would fare against the masters? The logical answer would be the beginner may lose more money than these 85% losers.

http://www.flickr.com/photos/90483352@N00/96795910

Consider an amateur basketball player playing against a professional basketball player. Lebron James or Kobe Bryant are basketball professional players. Anthony Davis is the top amateur basketball player in the USA and he was the number one draft pick in the 2012-2013 season. Now, if Anthony Davis will go up against LeBron James or Kobe Bryant in the NBA, what would be the result? It will be a mismatch and Anthony Davis will be “schooled” by either Lebron or Kobe. Why? LeBron and Kobe have been in the league for at least seven years. They are veterans of professional basketball already. They know the rules very well, they are quite familiar with their opponents, and they know when to attack and when to defend basketball. They know when to give up a foul or a layup and they know what it takes to win a championship. Anthony Davis? Oh he’ll get his due later on but meantime, it will be a Lebron or Kobe show.

Now, imagine an ordinary man or woman plunging in the intricate world of stock market where learned and educated men abound. Surely, he will be gobbled up by these sharks that make their living in the stock market. A professional versus amateur, the result is a mismatch.

If 85% of these professionals lose their money in the stock market, then how come it is still advisable to invest in the stock market?

The Lucky 15% Investors

Most of the 15% investors who earn a profit in the stock market are not active traders. Majority of the 15% smart investors are people who don’t care whether the market is up or down. They rarely buy and sell within a month. They do not care what is the daily price of the stock. What is most important to them is that the company is doing very well, it is an established enterprise, has a real growth, has massive potential to increase in value, and will last in your lifetime. I am not saying that professionals do not make money at all. In fact the 85% investors who lose money consist of every kind of investors. You have the investors who have limited knowledge, investors with good knowledge and investors with extensive knowledge in the stock market. Yes, all kind of investors can be included in the 85% losers and in the same way, all kind of investors can be included in the 15% investors.

One of the strategies of the 15% fortunate investors is buy great companies every month and ignore its daily fluctuations. They research, investigate, and make enquiries about the companies. They are investing time and effort in order to find great companies worth investing. In short, they do peso cost averaging.

https://www.flickr.com/photos/26614375@N00/381941233?rb=1

Peso cost averaging is buying stocks on a regular schedule whether the price is high or low. Normally, the interval is monthly. For example, you have P5,000 disposable income every month and you decide to invest it in the stock market. Ayala Land is a great company and you think it will grow in the next few years and will last in your lifetime. You bought Ayala Land shares last March whose price is P29/share with your P5,000 and it netted you 172 shares. Then last April, Ayala Land share price is 30/share and you bought the stock with your P5,000 giving you 166 shares. This May, Ayala Land share price is 31/share and your P5,000 gave you 161 shares.

An Early Christmas Gift From the Stock Market!

No, I did not received any dividends from my investments. Nor my stock portfolio is green. In fact, its the other way around. My portfolio is  red. 

A few months back, I'm beaming ear to ear with my paper profits. A two digit return in less than a year is great especially if you compare it to other investment vehicles.

Today, I am happier with my deficit. I don't care about the returns in the short term. I'm more excited on the opportunity to invest at fire sale prices!

I know some of you are somewhat worried on the current downturn. That's perfectly normal. Nobody wants to lose. 

However, stock market is not for the impatient. We're here for the long haul. And when I mean long haul, it's a decade plus. Yes, more hair will fall  and turn gray before you can truly feel the results of your investments. 

Today, however presents an opportunity to buy at lower prices. It's been a while since we've been at this level. It's a buyer's market now. And if you're a buyer, its an exciting times to invest indeed!

The current downturn was caused by the negative sentiment brought about by super typhoon Yolanda. Just as our lands, houses and trees were swept away by the powerful typhoon, our stock market was hit by the super typhoon also. Foreigners dump their shares since the aftermath of 'Yolanda'. 

Source:AFP

I watched CNN every single day during and after the typhoon. The images were apocalyptic! It's just unimaginable! 

My wife and I pulled some clothes from the drawer, packed them and gave them to a charity organization collecting relief goods for Yolanda.

As international media peppered their news program with images and videos of the destructive forces of super typhoon Yolanda, foreign investors were fed with information that requires them to reassess their investments on the economic repercussion of Yolanda's wrath. 

The Aquino administration is being praised for its drive against corruption by the international community. The removal of the SC chief justice, his blunt admonishment on under performing chiefs of departments, and sacking of corrupt officials. 

The investment grade, high GDP growth, growing remittances, robust consumption all helped in changing foreign investors sentiment to positive. As a result more dollars flows into our country.... 

Until 'Yolanda' struck. 

The slow response of the government, and political wrangling on aid to victims lowered the enthusiasm of foreign investors.

The Napoles scandal did not help too. The country is perceived that corruption still pervades in the government.

While the current sentiment brought the stock market down, I think the fundamentals remains the same. We are still a consumption driven country. Remittances will still increase every year and GDP growth rate will still be above its peers. 

The short term may not look good but I believe our country will just dust off the current bumps and will slowly change the sentiment from negative to neutral and finally positive.

Meanwhile, enjoy the current Christmas sale being offered in the stock market. It may not last longer.

FMETF - The First Ever ETF in the Philippines

Finally, the first ever ETF in the Philippines has arrived. First Metro’s ETF was listed last December 2, 2013 at Philippine Stock Exchange.

It’s ticker in the Philippine Stock Exchange is FMETF. It will be officially called First Metro Philippine Equity Exchange Traded Fund Inc.

ETF means Exchange Traded Fund. From the word itself, it is a fund being traded in the exchange. To be more specific it is an equity fund being traded in the Philippine Stock Exchange (PSE).

Historically, PSE only has companies like PLDT, Globe, BPI, MBT, Ayala Land, Etc. on its list of stocks traded in the exchange. Now, for the first time it includes an ETF as tradable in the exchange.

From here on, aside from seeing the usual tickers like BPI, MBT, TEL, GLO, ALI, etc. you’ll also see the ticker FMETF in the ticker tape. Yes, this ETF is being bought and sold just like a normal listed company.

FMETF is expected to replicate or mimic the PSEi as closely as possible. 

If PSEi goes down, FMETF NAVps should go down also. On the other hand, if PSEi goes up, NAVps should go up also. It doesn’t intend to be defensive during market declines or to outperform the Index.

The strategy is to invest on PSEi stocks with approximately the same weights as in the PSEi.

There are 30 stocks in the PSEi. The total market capitalization is 2.5 trillion pesos.

PLDT’s share of that market capitalization is 11.26%, SM 9.84%, ALI 7.51% and so on and so forth.  Now, FMETF is going to invest its fund in the same weights as the PSEi.

The fund shall invest 11.26% on PLDT, SM 9.84%, and ALI 7.51% and so on and so forth.

In this strategy, the fund is going to imitate the behavior of the PSEi; hence its NAVps shall considerably replicate PSEi returns.

In fact, when you draw a chart of FMETF, the graph will resemble almost exactly as that of PSEi.

Again, FMETF objective is not to be defensive during market declines or to outperform the market but rather to replicate the behavior of PSEi. If PSEi returns are high, FMETF returns should also be high.

The fund however cannot exactly match the behavior of PSEi. Trading and management costs will affect the NAVps. Additionally, changes in PSEi composition and diminishing liquidity may affect the NAVps and increase the tracking error slightly.

Overall, the fund expects the maximum deviation from PSEi at 5% against its NAV.

1	PHILIPPINE LONG DISTANCE TELEPHONE COMPANY "Common"	TEL	282,168,843,456	11.26
2	SM INVESTMENTS CORPORATION	SM	246,525,894,720	9.84
3	AYALA LAND, INC.	ALI	188,150,379,774	7.51
4	BANK OF THE PHILIPPINE ISLANDS	BPI	152,105,353,582	6.07
5	ABOITIZ EQUITY VENTURES, INC.	AEV	133,507,816,930	5.33
6	AYALA CORPORATION	AC	131,201,830,656	5.24
7	SM PRIME HOLDINGS, INC.	SMPH	130,519,963,196	5.21
8	BDO UNIBANK, INC.	BDO	110,555,944,946	4.41
9	INTERNATIONAL CONTAINER TERMINAL SERVICES, INC.	ICT	105,389,876,494	4.21
10	UNIVERSAL ROBINA CORPORATION	URC	101,668,897,603	4.06
11	ALLIANCE GLOBAL GROUP, INC.	AGI	101,055,107,323	4.03
12	METROPOLITAN BANK & TRUST COMPANY	MBT	100,131,715,337	4
13	JG SUMMIT HOLDINGS, INC.	JGS	88,472,752,441	3.53
14	JOLLIBEE FOODS CORPORATION	JFC	70,718,194,512	2.82
15	METRO PACIFIC INVESTMENTS CORPORATION	MPI	53,018,331,178	2.12
16	GT CAPITAL HOLDINGS, INC.	GTCAP	52,290,000,000	2.09
17	ABOITIZ POWER CORP.	AP	48,566,788,446	1.94
18	GLOBE TELECOM, INC.	GLO	46,669,155,200	1.86
19	ENERGY DEVELOPMENT (EDC) CORPORATION	EDC	45,187,500,000	1.8
20	LT Group, Inc.	LTG	43,610,197,236	1.74
21	DMCI HOLDINGS, INC.	DMC	41,080,492,180	1.64
22	MEGAWORLD CORPORATION	MEG	38,203,981,542	1.53
23	ROBINSONS LAND CORPORATION	RLC	32,889,835,741	1.31
24	MANILA WATER COMPANY, INC.	MWC	29,704,905,011	1.19
25	SEMIRARA MINING CORPORATION	SCC	29,625,750,000	1.18
26	BLOOMBERRY RESORTS CORPORATION	BLOOM	27,842,703,625	1.11
27	SAN MIGUEL CORPORATION	SMC	23,510,748,885	0.94
28	PETRON CORPORATION	PCOR	22,504,000,842	0.9
29	FIRST GEN CORPORATION	FGEN	14,144,584,575	0.56
30	PHILEX MINING CORPORATION	PX	14,141,531,542	0.56
	TOTAL		2,505,163,076,973	99.99

 Source: Pse

As part of its reportorial requirements with PSE, FMETF is required to disclose its Net Asset Value per share (NAVps) every day.

This daily disclosure is important because it discloses the NAVps and the tracking error of the ETF.

Since FMETF is a listed fund, investors buy and sell shares of FMETF that do not correspond to the NAVps of the fund. For example, on December 6, 2013 the NAV per share of FMETF is 96.15 (see below PSE screen grab). The closing price of FMETF on same date is 97.15. There was a difference of 1 peso.

FMETF is good especially for investors who wants an exposure in the stock market but doesn’t want to invest in individual stocks. Since FMETF is required to buy a basket of stocks listed in PSEi, a single company cannot bring your investment considerably down.

FMETF offers exposure to various blue-chip companies. Imagine going to the supermarket, filling up your trolley with TEL, SM, ALI, BPI, etc, queuing at the counter, and paying your ‘grocery’ in a single transaction.

Since FMETF is listed in the PSEi, it trades like a stock and you can see the daily change in its NAVps.