If you knew that a company does business in an ethical way, would you buy more of its shares? Would you do more business with that company? Does good corporate governance translate into shareholder or customer loyalty?

Jesus P. Estanislao, chairman of the Institute for Corporate Directors, thinks so. He says corporate governance is closely linked with performance. He doesn’t have the figures yet. He is still in talks with the University of Asia and the Pacific to do a thorough study on the topic.

During the ICD roundtable last Wednesday, Jess revealed the top 20 listed companies in the 2007 Corporate Governance Scorecard. Here is the list:

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(Investing can feel like going through a maze. Photo: AFP)

There was a “stock market bloodbath” earlier today at the Philippine Stock Exchange as Philippine equities tracked heavy losses across financial markets all over the world on fears – again – of a US recession. For sure, business newspapers tomorrow morning will be rife with discussion on how investors are facing their worst losses in recent months and how US President George Bush’s $140 billion economic stimulus package was ignored by the world.

As I sat quietly in my home-office to digest the news after a rather busy day, and watched a leaf from my Narra tree waft lazily to the ground, the thought hit me that it hardly feels “bloodbath-ic” in here. The world looks the same as it did yesterday and the day before. It certainly still feels like 2008 hasn’t arrived yet.

Then I got a harried text message from a friend who last year invested in an equity-laced investment instrument. “I’ve lost so much money! Should I withdraw my investment?”

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Photo courtesy of Michelle Morelos.

I never really believed in Santa Claus. But I know all about him, his reindeers and his sleigh. In financial markets, especially in stocks, investors have, year after year, observed a thing called Santa Claus rally.

That’s when stocks jump higher in between Christmas and New Year’s Day. No matter how tough the year is, there’s a lift in stock prices whether small or big. Nice gift from Santa, don’t you think?

Perhaps it doesn’t really matter why stocks go up during the Christmas season. What matters more is what to do with that rally? Do you grab the chance to sell? If you follow the age-old adage to “buy low and sell high”, it would be best then to avoid at all cost any situation where you have to unload stocks during the Christmas season. Expect this to drag on to January because of what is called “the January effect” when stocks climb even higher in anticipation of more investments from the public. In the next few days in fact, market players expect the PSEi to go higher after Wall Street’s rise last Friday.

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I find it remarkable that quite a number of INQUIRER.net readers are raring to invest in local stocks considering that those in more advanced markets are still stumped by subprime worries. From the kind of emails and queries I receive, the gung-ho attitude is not borne of ignorance but of a desire to be part of the action in the capital markets and a hope that owning stocks will make retirement so much better. From what you tell me, I can sense that the “prestige” of playing with stocks is a big part of the equation too.

Perhaps some of you are thinking of investing your Christmas windfalls instead of spending them. Or for OFWs, investing will hasten the days for your final homecoming. Investing in equities is a personal choice, and one that might work for some and not for others. To begin, the first thing that you have to do is get a broker. The Philippine Stock Exchange requires investors to be represented by a broker before they can own or sell stocks.

For many who are not in the country physically, setting up an account and making phone calls made to brokers can be quite expensive. Online brokerage accounts have become convenient ways of investing in the stock market because communications via email lessen the cost. Secure websites that display personal accounts add to the attractiveness of this option.

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(Below is a guest post by Malaya Laraya of Campos, Lanuza & Co. and a Registered Financial Planner. Aside from being an RFP, Aya is also a Certified Securities Representative, a Certified Investment Company Representative and a realtor.  He has written for Business Mirror, MoneySense, Inquirer.net and for Sense and Style.  He also conducts financial education seminars for schools (like DLSU, ADMU, St. Scho, PLM and PWU) and professional organizations (like the Pasay-Makati Realtors Board, Bobson Jeans and PAREB). )

For all of those considering investing in the local stock market, here are a couple of companies that have signified their intention of listing in 2008.
 
1.  Viva Entertainment Group. Viva is the next media company that is planning to enter the stock market, after GMA7. Slated for listing sometime in the first quarter of 2008, Viva has the advantage of being a well-known name and will surely generate quite a bit of interest for both novice and veteran investors.  Ostensibly, the firm is listing to fund several big movie projects as well as to further branch out into the recording and TV business.  There is actually an off chance they might get listed in January so even at this early stage, there is already talk in the market about this IPO.
 
2. Cebu Pacific.  Local budget airline Cebu Pacific has also announced its plans to list in the bourse next year. Proceeds from the listing are meant to upgrade and expand their current fleet of planes. This is another issue that is quite well known by the general public so it is to be expected that there will be quite a demand for this issue as well.

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What do you give to someone who has everything?A few Christmases ago, Synergeia Foundation president Milwida Guevara found herself worrying what to give to Washington Sycip for Christmas.

Apart from being a well-known figure in the business sector, Wash is one of the reasons Synergeia can do so much work in the education sector, Milwida says. (If you are interested in reading more about this very interesting man, read my favorite professor’s blog post on him here. Butch Dalisay finished his biography on Wash Sycip just this year.) After agonizing about her problem, Milwida bought Wash a toy train that moves on its tracks. You know the type, either your son wants one or your husband does.

“He was so happy with it, he played with it in his office and called his staff to look at the train,” Milwida told me, laughing.

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In this video, Kathleen B. Buenaobra (left) of the Philippine Stock Exchange shows Money Smarts readers how to interpret the figures on the electronic trading board that looms over the trading floor. Interest in the stock market is growing among retail investors put out by low interest on deposits.

Yup, we earned P200,000 just by showing up at the Philippine Stock Exchange trading gallery last Wednesday, November 28, 2007. Virtual money, that is!

Despite all the warnings of higher risk, disclaimers and the current volatility in the stock market, 17 MoneySmart readers who trooped to the PSE yesterday wanted to give stock investing a try. So, we agreed on a little experiment, similar to what our Money Makeover couple did last month.

We decided to each “play around” with P200,000 virtual money for one month. It works like this: we each decide how to allocate our money based on current stock market prices. We are choosing only a maximum of eight stocks that we want to trade.

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Don’t forget, its the MoneySmart tour of the Philippine Stock Exchange trading gallery today. I will meet those who have confirmed at the lobby of the trading gallery. For those who cannot come, we will have pictures and videos for you . I have already received requests for more tours from overseas Filipinos who cannot join todays activity. No promises, dears, but I will definitely try to arrange more.

PSE, here we come!

Hot money, hot Pinoy seafarers (were you thinking of hot Pinoy hunks? Tsk tsk), hot business opportunities in medical tourism – everything’s hot today except the weather. We are expecting another typhoon…sigh. It’s always like that before or after my birthday. EVER since I was born 21 years ago. (Did you just do a double take?)

The Philippines attracted $274 million net “hot money” last October, the Philippine Daily Inquirer reported today. That’s quite a huge jump from $35.8 million in September, and totally deserves a blog post.

In this post,  I wrote that hot money refers to short-term investments by foreign investors in local stocks, bonds and money market instruments. While they influence the local financial market, we need to remember that they are very speculative and can leave our shores at the touch of a button. The long-term growth of our stock and bond markets, in fact, will depend on whether domestic investors (that’s you, me and our OFW friends and relatives abroad) will begin to invest in the domestic market. Policy-makers hope a wider base of domestic investors will not be as jumpy as foreigners.

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