Tuesday, February 26, 2013

Short Answers to Unanswered Questions: Revisiting Share Types and Converting from a USD to a Peso Short Term Investment


Dear Investor Juan,

I know that to be listed at the PSE there is a 10% float requirement. But for other share categories are there associated percentages required.

For example if you have an Authorized Shares (example only) 1,000,000 shares what percentage of that can you keep as Treasure Shares, For Outstanding Shares what percentage can be Restricted Shares,...and so on...

I hope my question is clear to you.


Dear Anna,

As far as I know, a firm can issue shares up to the number of authorized shares and can buy back publicly owned shares (resulting in treasury shares) up to what the minimum float requirement allows (since buying back publicly-held shares reduces the firm's float). The float percentage requirement also affects the proportion of restricted shares; in the case of the Philippines, it implies that the percentage of restricted shares relative to outstanding shares of a publicly-listed company cannot be more than 90%.


Dear Investor Juan,

Good day, I have Dollar Time Deposit in BDO. But then the % interest is not that good. (.3750%/mo.) minus the tax. I was thinking if I will move it to UITF Money Market. But since Money Market has an average yield of 3.26%/year, I really cant decide if I should continue to transfer it. Thank you very much.

Also, congratulations for making good blog about investments. This is a good sample of reference. God bless and more power. 


Dear Anonymous,

Given the higher peso interest rates and the expected further appreciation of the peso this year, I would choose investing in a peso money market fund over a USD time deposit account. That said, instead of moving your funds from the USD time deposit account to a peso money market account, you might also want to consider keeping the former and just investing in a peso money market fund in the future. Having investments in both currencies this way can protect you from future exchange rate fluctuations.

You also need to consider the currency in which you earn and consume since currency conversion entails significant costs.

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