What’s an Index?
An index is an investor’s benchmark or reference for evaluating the performance of a fund, security, or investment. Basically, you’ll want to compare today’s index to yesterday’s index to determine whether stock values are going up or down. By checking the index, you can gauge how the market is performing in general without the need to individually compare the prices of all listed stocks.
What is PSEi?
The Philippine Stock Exchange Composite Index (PSEi) is a group of 30 selected Philippine companies used as reference for determining the general performance of the Philippine Stock Market. The PSEi is also often referred to as the Philippine “stock barometer” as it summarizes both the Philippine stock market’s general activity and the Philippine economy’s overall performance. A high PSEi value means Philippine stocks are priced high on the average, whereas a low PSEi value means stocks are priced low on the average. In a general sense, a soaring PSEi value is desired as it reflects the local economy’s healthy performance and growth.
In March 2012, the PSEi was valued somewhere around the 5000 level. In April 2013, the PSEi made a historical feat when it breached the 7000 mark. This 2017, we keep track as the index strives to stay above the 8000 mark. Check your local newspaper’s business section now and you’ll see how often the importance of staying above the 8000 mark is emphasized in the stock market forecasts.
Are newspaper forecasts real time?
Nope. 🙂 Take note that newspapers only report the previous trading day’s stock quotations. For instance, this particular newspaper I’m using as example is dated August 3 but reports August 2’s stock market’s performance in comparison to August 1’s performance. For real time stock quotations, you may check out www.pse.com.ph. I shall write more tutorials on how you can efficiently maximize the use of the PSE website so don’t forget to subscribe to keep posted!
Basic Stock Jargons In Philippine Newspapers:
PSE – Philippine Stock Exchange: the only stock exchange of the Philippines.
EPS – Earnings per share. The EPS serves as an indicator of the company’s profitability and is derived from the formula:
EPS = (net income – dividends on preferred stock) / average outstanding shares
OPEN – The first price a stock was traded on a trading day. The opening market price of a stock on a trading day.
CLOSE – The last price a stock was traded on a trading day. The closing market price of a stock on a trading day. This is what you’ll often monitor and compare once you purchase your first company stocks.
HIGH – The highest price a stock was traded during the day.
LOW – The lowest price a stock was traded during the day.
52 WEEKS HIGH – The highest price a stock was traded in the last 52 weeks.
52 WEEKS LOW – The lowest price a stock was traded in the last 52 weeks
% CHANGE – Percentage Change
PE RATIO – Price-Earnings Ratio (also P/E Ratio). Derived from the formula:
PE Ratio = Market Value per Share/ Earnings per Share
VOLUME – The total number of shares traded during the day.
GAINERS – Company stocks that increased in market value
LOSERS – Company stocks that decreased in market value
MOST ACTIVE STOCKS – The stocks that had the highest volume or stocks that had the most shares traded over the day.
DIVIDENDS – Money or stock paid by a company to its shareholders.
I’ll end part one of this discussion here. For the mean time, grab a copy of your local broadsheet and try to analyze and interpret the stock quotes section now that you know what those stock trading jargons mean. In the next article, I shall talk about stock names, acronyms, classifications and ticker tape symbols so don’t forget to subscribe to keep posted for updates. See you!
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