How finance folk use it
A stock exchange is a place where stocks of various companies are traded. It allows companies to raise capital for growth and other purposes by selling shares of ownership to the public.
There are certain prerequisites that firms must meet before they can be listed in the exchange, and there are also requirements (like revealing the performance of the previous year) that companies should make for their stock to remain tradeable.
In the Philippines, the only stock exchange is the PSE, or Philippine Stock Exchange. Established in 1992, it is the combination of older two stock exchanges, the Manila Stock Exchange and the Makati Stock Exchange.
Is it good or bad?
A stock exchange is good because it allows a convenient and reliable place for buying and selling of shares. Since trading is centralized here, it helps keep transactions organized and fair, and makes stock prices easily accessible to anyone who is interested.
To help track performance of the market, the PSE has a main index (PSEi), which is a fixed basket of the 30 largest and most active common stocks listed in the PSE. There are also six other indices specific to different industries, and a broad all-shares index.
What it means for you
A stock exchange makes it possible for people to easily have or sell part-ownership of a company by giving them a place where these shares can be traded.
Remember, though, that individuals cannot buy or sell stocks in an exchange themselves. They have to go through a stockbroker (either a person or an online service) who will execute your orders for you.
In the PSE, trading happens from 9:30 AM to 3:30 PM daily, with a break from 12 to 1:30 PM.
