Risk and Financial Literacy

Topics: Stock exchange, Stock market, Investment Pages: 4 (876 words) Published: August 22, 2013
Chapter 1: Problem and Its Background
Historical Background
History of Stock Investing
Stocks have been very unpopular to the Filipino people despite the fact that it has been an investment instrument since 1927 when the Manila Stock Exchange was opened in the Binondo Business District. Many people are unaware of using stocks as an investment vehicle. A typical Filipino would prefer opening a bank account, which earns constantly at a very low rate, than to open a stock investment account that can earn far beyond the rate of an ordinary savings account or even a special deposit account. Some Filipinos classifies stock trading as a form of gambling and would compromise money. Experts believe that the reason behind the unpopularity of stock investment is that Filipinos are not well educated with the flow and nature of using stocks as a way of earning money. To encourage investments in the stock market, the Philippine Stock Exchange launched its financial literacy and market education programs.

The stock exchange made the market more accessible by using technology, like the internet, to facilitate trading transactions and inform investors about stock price movements and other related information regarding stock trading. The relentless efforts of the Philippine Stock Exchange to encourage Filipino people to invest and take advantage of the improving economy seem to be effective.

Based on the study conducted by the Philippine Stock Exchange, more people invested in the stock market. In 2012, the total accounts amounted to 525,850 a 4.1% higher than the figures from 2011 which is 505,054.

History of PSE
The Philippine Stock Exchange was formed from the country’s two former stock exchanges, the Manila Stock Exchange (MSE), established on August 8, 1927, and the Makati Stock Exchange (MkSE), which was established on May 27, 1963. Although both the MSE and the MkSE traded the same stocks of the same companies, the bourses were separate stock exchanges for...
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