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Oct 22, 2024 | 
business.inquirer.net | Henry Ong - |Henry H. Ong
The stock market is often described as a barometer of investor sentiment. Optimism and pessimism drive prices, and one of the simplest ways to gauge that sentiment is by examining the premium investors are willing to pay for stocks. Let’s break down what this premium represents. A stock price can be thought of as having two main components: intrinsic value and the growth premium.
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Oct 15, 2024 | 
business.inquirer.net | Henry Ong - |Henry H. Ong
When it comes to investing, one factor that often gets overlooked but is critically important is the real interest rate. Defined as the nominal interest rate adjusted for inflation, the real interest rate is a key indicator for understanding the cost of capital. The real interest rate offers insight into the true return on investments after factoring in inflation. It is calculated by subtracting the inflation rate from the nominal interest rate.
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Oct 8, 2024 | 
business.inquirer.net | Henry Ong - |Henry H. Ong
When central banks cut interest rates, the initial reaction is often positive. Investors, traders, and media outlets typically focus on the immediate benefits—lower borrowing costs and potential a boost to economic activity. However, while this may generate short-term optimism, it’s important to understand that the broader implications for the stock market may not be as beneficial in the long term.
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Jul 23, 2024 | 
business.inquirer.net | Henry Ong - |Henry H. Ong
The recent appreciation of the peso has provided a temporary boost to the stock market, leading the Philippine Stock Exchange (PSE) Index to rally and challenge higher resistance levels above 6,700. However, despite the current wave of optimism, we need to recognize that this strength is primarily driven by short-term market dynamics. Several underlying fundamental and structural issues suggest that the peso appreciation is unlikely to be sustainable in the long run.
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Jul 16, 2024 | 
business.inquirer.net | Henry Ong - |Henry H. Ong
Last week, we discussed how historically, the stock market and the peso-dollar exchange rate often move in opposite directions. When the peso depreciates against the dollar, the price of the dollar goes up while the stock market declines. Conversely, when the peso appreciates against the dollar, the price of the dollar goes down while the stock market rises.
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Jul 9, 2024 | 
business.inquirer.net | Henry Ong - |Henry H. Ong
The relationship between the exchange rate and the stock market can significantly influence market behavior. A weakening peso often leads to a decline in the stock market. When the peso weakens against the dollar, it means that the peso has less purchasing power. This depreciation can have several adverse effects on the stock market. One risk is the increase in financial burden for companies with dollar-denominated debts.
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May 28, 2024 | 
business.inquirer.net | Henry Ong - |Henry H. Ong
MANILA, Philippines — The stock market kicked off the year with a surge of optimism, helping the Philippine Stock Exchange Index (PSEi) gain as much as 9.6 percent in the first three months. However, just like in previous years, this early momentum is beginning to wane, and the market is once again facing downward pressure, which appears to be tilting toward another potential loss this year.
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May 21, 2024 | 
business.inquirer.net | Henry Ong - |Henry H. Ong
Consumer spending has long been a cornerstone of economic growth in the Philippines, constituting about 75 percent of the country’s gross domestic product. This high proportion underscores the important role that consumer expenditure plays in driving the economy. Even after the initial impact of the COVID-19 crisis, which had seen the economy suffer a 9.5-percent decline, consumer spending showed resilience, bouncing back with 8.4 percent gains in 2021 and 14.5 percent in 2022.
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May 14, 2024 | 
business.inquirer.net | Henry Ong - |Henry H. Ong
When we talk about how well a country’s economy is doing, we usually look at something called gross domestic product (GDP) growth. It’s like the main number that tells us how healthy and strong the economy is. But only looking at GDP growth doesn’t give us the whole story. We also need to look at another important number: the national savings rate, which tells us how much money people in the economy are saving compared to the total income generated.
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Apr 9, 2024 | 
business.inquirer.net | Henry Ong - |Henry H. Ong
The connection between money and happiness has been debated for a long time, and the answer is not so straightforward. A study by Matthew Killingsworth of The Wharton School suggests that higher incomes are generally associated with greater happiness, especially when people have enough money to meet their needs. However, once a certain income level is reached, having more money doesn’t make people significantly happier.
