Tuesday, July 29, 2008

Derivatives Seminar on Sept. 2, 2008 - 93% of seats taken!




We are expanding the seminar area to accomodate new Registrants!!

CFAP is hosting a presentation on the topic “Managing Volatility: Derivative
Strategies – How, Why and When” on Tuesday, September 2, 2008, from 2:00
to 5:30 PM at Ballroom 1, Renaissance Makati City Hotel Manila. Our featured
speakers are Mr. Walter Haslett, CFA, FRM and Mr. Matthew Moran.

About the Speakers




Mr. Haslett is CEO of Miller Tabak Capital Management and Director of Option Analytics
for Miller Tabak + Co., LLC where he is responsible for developing option-related
products, research and money management services. Haslett previously founded a
derivatives-based investment management firm managing more than $300 million in
conservative option strategies. He is a member of the Institutional Investor Advisory
Committee for the Chicago Board Options Exchange, a group of the largest buyside
option users in North America.

Mr. Moran is Vice President for Business Development of the Chicago Board Options
Exchange, and is responsible for many of the exchange's marketing and educational
efforts for pension funds, mutual funds, and other institutional investors. He had a
leadership role in developing and marketing the CBOE S&P 500 BuyWrite Index (BXM)
and the CBOE S&P 500 PutWrite Index (PUT), both of which received the Most
Innovative Benchmark Index award at the annual Super Bowl of Indexing Conference.

You may start posting topics and questions that you would like us to tackle during this seminar.

For inquiries, please call the CFA Philippines Secretariat at +63(2)3971010 / +63(921) 3321151 or send emails to secretariat@cfap.cfasociety.org.

FEES
Professors/Students (Please present valid School ID) PHP 1,500.00
Early Bird Rate (Payment Deadline: Aug. 29 2008) PHP 2,500.00
Regular Rate PHP 3,000.00

Monday, July 28, 2008

Investment Research Challenge - Go Team CFA Philippines!!

On October 2008, teams representing their respective Universities will meet and compete for the chance to advance to the 2nd round in the Investment Research Challenge. The winner of the 2nd round shall represent the Philippines in the Regional Competition. Philippine Teams will have to produce a Research Report on Manila Water Company. The Challenge will require teams to analyze the Fundamentals and Financial Statements of the company.

The Regional Competition will be held in Singapore on February 2009.

In April 2009, the Finals will be held in London.

Manila Water Company

Manila Water Company is the company to be analyzed for the 1st round of the competition. This is a Philippine listed corporation in the Utilities Industry and it provides Water and Sewerage services to 5.1M residents of Metro Manila. In 1997, MWC had only 3 million customers and these customers did not have 24 access to water.

"Manila Water's future growth will be focused on the improvement and expansion of water services in the East Zone, its core business area. Growth in this area is expected to come from the increased demand brought about by the population growth and expansion of water and sanitation service commitments to unserved and underserved areas. The Company also regularly explores the possibility of bringing its services in areas outside the East Zone. Manila Water is considering new concessions, acquisitions or partnerships with other water districts, sanitation projects as well as management service contracts in selected countries in the Asian region." - MWC website

Bulls say:



Bears say:



Please go to http://www.manilawater.com/ for more information.
Please go to http://www.pse.com.ph/ and read the Company Disclosures of MWC and peers.

More details will be posted on this blog. Note that all views and comments in this posting are not the official views of CFA Philippines.

You are welcome to post your questions. Check out the comments section for advice and guidance from your friends at CFA Philippines!

Thursday, July 24, 2008

Marc Faber in the Philippines on October 9, 2008! : Commodities to take pause

Marc Faber will be a speaker at an event co-presented by CFA Philippines on October 9, 2008!

Marc Faber, a speaker at a CFA Philippines investment seminar last year, thinks that industrial commodities will experience price pressure in the second half of 2008, before returning to their uptrend next year. His view about market difficulties last year was dead on. Is he correct again this time? http://www.bloomberg.com/apps/news?pid=newsarchive&sid=anaGrzNdKquc#

Friday, July 4, 2008

How to grow the Philippine stock market?

The Philippine stock market currently has a market capitalization of about US$80 billion. According to data provided by the World Federation of Exchanges, that size is bigger than the stock exchanges of Sri Lanka and New Zealand (US$7 billion and US$41 billion respectively), but otherwise smaller than other stock exchanges in the Asia-Pacific region. Indonesia and Thailand each has a market capitalization of around US$200 billion. As of April 2008, the Philippine Stock Exchange had 245 listed companies, Indonesia had 388, Thailand had 523. A recent study by the Philippine Stock Exchange found that less than 0.5% of the population participates in the local stock market.

The main reasons that countries promote stock exchanges are :
  • As a means to raise capital for local businesses;
  • For developing the financial sector (as a source of jobs and economic growth);
  • To directly generate revenue for the government (stamp duties, tax on transactions and so on).

Most countries find the first factor most important, whereas cities like Hong Kong and Singapore have managed to grow their financial sector to become a major segment of the economy in terms of jobs and business generation. The third factor normally would be a secondary consideration, since the major benefits of a successful stock exchange are incurred from the first two factors. However, some times a successful stock exchange can generate a sizeable revenue for the government directly in addition to the benefits reaped from the first two factors. For example, even though Hong Kong only levies a 0.1% duties on the value of stock transactions, revenue from this source is estimated to be about 10% of the government's total projected revenue for 2008/9 (assuming stamp duties from stock transactions make up half of the stamp duties collected), or over USD$2 billion. This is not a one-off payment, but recurring in nature, although the amount may vary from year to year.

There should therefore be significant benefit to the economy if the Philippines could grow its equity market, which, at the moment, is suffering from:

  • anaemic local interest in investing in the stock market;
  • limited number of listed companies or products.

Which one should we tackle first, if we want to grow the Philippine stock market? The first problem certainly looks more serious than the second, with such low local participation in investing. The second problem, however, may be easier to tackle. The first step being the elimination of the 4% tax levied on Initial Public Offering.

Indeed, it is very hard to understand why any government would want to discourage its companies from raising capital. While companies are working so hard to try to reduce the cost of borrowing or increase profit by even as little as half a percent, the 4% tax on IPO proceeds is incomprehensible from any public policy perspective. Most governments would find it more beneficial to the whole economy to encourage more stock market listing.