List of Contents for More Woodturning

Recent Sales of Unregistered or Exempt SecuritiesOn July 20, 2006, the SEC approved COL’s application for exemption from the registrationrequirements of the SRC, for the issuance of 18,750,000 common shares of stock of COL underits Stock Option Plan for an exercise price of One Peso (P=1.00) per share to its directors, seniormanagers and officers and its affiliates, as well as other qualified individuals.As of December 31, 2007, a total of 46,000,000 stock options were granted which are exercisableone and a half (1 ½) years from the date of listing of COL’s shares at the PSE and will terminateten (10) years from the said date. During the year 2012, a total of 9,260,000 stock option shareshave been exercised.Item 6. Management's Discussion and Analysis of Financial Condition and Results ofOperationsThe following discussion and analysis of COL Financial Group, Inc. and its HK Subsidiarycollectively referred to as the Group should be read in conjunction with the audited consolidatedfinancial statements filed as part of this report.Industry and Economic ReviewThe Philippine market performed strongly during 2012, with the PSEi rising by 33.0%. Averagedaily value turnover also picked up to P7.2 2 billion from P5.7 2 billion in 2012, benefiting fromthe strength of the market and growing interest among foreign investors. During 2012, net foreignbuying jumped by 69.5% to P97.5 2 billion.Numerous factors were responsible for the market’s strong performance. Domestically, thePhilippines benefited from an upgrade in its credit rating by all three major credit ratings agenciesnamely, Fitch, S&P and Moody’s. The Philippines also delivered strong economic growth, withGDP rising by 6.6%, driven by the country’s resilient consumer segment and the significantincrease in government spending. Interest rates also continued to drop, brought about by ampleliquidity and the Bangko Sentral ng Pilipinas’ (BSP) move to cut interest rates by four times for atotal of 100 basis points.Factors were also highly favorable outside of the country. Although global economic growthremained weak, liquidity conditions became highly favorable as global central banks furtherloosened their monetary policy. For example, in the US, the Fed announced its third round ofquantitative easing or more commonly known as QE3 last September. The Fed also said it wouldextend its extremely low rates policy until the unemployment rate improves to 6.5% and as long asinflation stays below 2.5%. Meanwhile, in Europe, the European Central Bank ("ECB")successfully prevented another liquidity crisis from materializing, helping improve investor riskappetite. Due to growing concerns regarding the ability of Italy and Spain to meet their maturingdebt obligations, the ECB offered three-year loans at very attractive terms to European banks inlate 2011 and early 2012. In September 2012, it also announced that it would buy an unlimitedamount of government bonds with maturities of between one to three years. Ample liquiditycoupled with improving risk appetite globally also benefited the Philippine market as it resulted tohigher foreign fund flow.While the Philippine market performed strongly in 2012, the same could not be said of the HKmarket which showed high levels of volatility due to signs that China’s economic growth wasslowing down. Earlier during the year, the Chinese government said it would shift focus away fromexports and capital spending to consumer spending. As a result, China’s GDP growth slowedcontinuously for seven straight quarters, including the first three quarters of 2012.- 18 -