Scripophily - Philippine Daily Inquirer

Corporate Securities Info
Scripophily
By Raul J. Palabrica
Philippine Daily Inquirer
First Posted 01:11:00 01/25/2008

MANILA, Philippines -- You’re probably wondering what the title of this article means. Scripophily is the study and collection of stocks and bonds. The term combines the English word “scrip,” which refers to ownership right, and “philos,” the Greek word for love. The enthusiasts of this hobby are called scripophilists or scripophiliacs. In the United States, they collect old and rare stock certificates and bonds for aesthetic and historical reasons.

Until the advent of computer technology, the certificates and bonds of US and European firms were printed on real parchment paper and contained elaborate artwork. They had geometric patterns, mosaic-like forms, pentagrams, gargoyle images and photos of the founder of the corporation.

Some were adorned with the coat-of-arms of their pioneers, or decorated with gold-plated ribbons or strands. Hence the use of the phrase “gilt-edged securities” to describe the stocks of blue-chip corporations.

Since these certificates and bonds are virtual works of art, their value increases. Sometimes, the documents, despite the intervening years, remain valid and subsisting. When that happens, their holders can sell the stocks or collect unpaid dividends; for unredeemed bonds, the principal and uncollected interests could bring in unexpected income.

In the Philippines, some companies are quite particular about the format and look of their stock certificates. They consider this proof of ownership as an extension of the personality and image of the company. The certificates are “dressed-up” to be pleasing to the eye without appearing extravagant.

These certificates go hand in hand with glossy and well-prepared annual reports.
The certificates of many of the listed firms have intricate border designs. They contain curlicues and leaf etchings that are common to antique oil painting frames.
The entries in the certificate are handwritten, using the style and font seen in school diplomas.The colors and shades used match those that appear in company trademarks or logos.

Basic info

Corporations that trace their roots to the Spanish or American colonial period embellish their certificates with designs that reflect the art mood during those times.

Those with Castilian links are partial to the “coat-of-arms” style. The Art Deco fashion that was popular during the ’40s seems to be the favorite of corporations that were organized during the Commonwealth years.

Some certificates have reproductions of statues of mythical Greek or Roman gods and goddesses similar to those that grace the halls of important government buildings in the US and Europe. This kind of certificates projects an “aristocratic” aura that seems to convey the message that they belong to a class of its own.
With the effort and creative work that went to their preparation, they are fit to be framed and publicly displayed.

Noticeably, “stock certificate art,” if I may give it that name, appears to be on its way out. The trend nowadays for new corporations is to make the design of stock certificates as simple as possible. Some of the certificates can be described as “plain Janes” or of the “vanilla type,” as financial advisers describe simple banking transactions.

Savings

With the company logo as the only decorative item, the contents of the certificate are limited to the corporation’s name, number of shares, certificate number, issue date, seal and the names of the corporate secretary and transfer agent.
At first glance, they appear to be computer-generated and printed by the office machine. The only concession to tradition is the use of thick paper, not ordinary bond paper.

Cost-cutting is often the reason for scrimping in the preparation of certificates. For some companies, the form of the certificate is a reflection of the management style of their owners.

Don’t get me wrong. I have nothing against plain-looking certificates. Investors buy stocks for their future earnings value, not for the beauty of their certificates.
In fact, certificates are not necessary to prove a stockholder’s ownership. As long as a stockholder has paid in full his subscription, he is entitled to all the rights and benefits that go with that acquisition.

Give or take two years, stock certificates may become a thing of the past for listed corporations in our country.

Following the trend in stock exchanges abroad, the local bourse is keen on implementing a “scripless” system of stock registration.

Under this arrangement, the certificates will be recorded and lodged in a depository company. No hard copy of the certificate will be given to the stockholder. Instead, he will only get written advice about his stock ownership.

All transactions over the stocks will be done electronically.

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