News of people taking to the streets in Makati spread quickly in my law school. Prior to this news, I was willing to bet on a good week next week for Philippine stocks. Yet, since Political turmoil was never good for investor sentiment, I'll withhold such a bet. The more likely scenario is that while people take to the streets, more money will look to run for safe haven and join the overcrowded sidelines. Emotion will drive both.
Luckily its still the weekend and many things could happen between now and 9:30AM on monday morning. I'm still keeping my fingers crossed.
Friday, February 15, 2008
profits and more profits: JFC, AC, MBT, SECB, URC
Focusing on fundamentals
More corporate names have announced larger profits:
JFC's (Jollibee food corporation) profit is up 9.4%;
AC's (Ayala Corporation) profit is up 33%
MBT's (Metropolitan Bank and Trust Company)profit is up 27.5%
SECB's (Security Bank) profit is up 42%
URC's (Universal Robina Corporation) profit is up 15.4%
The lowest gains in percentage points belonged to JFC and was below Citisec's estimates. The only company to beat consensus expectations was SECB. Incidentally, JFC was the top performer in our bourse yesterday.
More corporate names have announced larger profits:
JFC's (Jollibee food corporation) profit is up 9.4%;
AC's (Ayala Corporation) profit is up 33%
MBT's (Metropolitan Bank and Trust Company)profit is up 27.5%
SECB's (Security Bank) profit is up 42%
URC's (Universal Robina Corporation) profit is up 15.4%
The lowest gains in percentage points belonged to JFC and was below Citisec's estimates. The only company to beat consensus expectations was SECB. Incidentally, JFC was the top performer in our bourse yesterday.
closer to the tipping point after a long sideways tragectory
Eye of the storm
When our market moves sideways, I get bored. Its been going on for about two weeks, and now I feel the tipping point is near. We'll see big movement soon, but whether it is up or down will be influenced largely by the technicals this time around.
U.S.'s vacillating market
Nowadays the U.S. market been entertaining enough keep the whole world watching. The U.S. market's fickle disposition throughout the week let us see a nice rally care of Mr. Warren Buffet and then a sell-off on valentines day, care of U.S. FED Chair Ben Bernanke.
No excuse to be all out gloomy yet
With these two days as reference points, our market still seems to be tracking the U.S. major indeces but in hardly as entertaining a fashion. We ended our week dangerously close to the 3170 level that tsupitero has been warning us about. The bright side of it all is that technical analysts don't quite have an excuse to say that we're going to see a lower low. With so many investors staring at bad January index figures, the smallest things can spark a sell-off. If technicals start predicting a drop, I think even their largest critics will choose to err on the side of caution.
Green and go?
I feel that we're very close to the tipping point and it will be the technical analysts who we should listen to. We should watch to see whether technicals will say that our market either passed or failed the double test of support. After all, most fundamentals are still positive. When we hear both the technical analysts and the fundamental analysts saying good things are to come, the lights we'll green and go and hopefully all that money sitting in the sidelines will be put to good work.
When our market moves sideways, I get bored. Its been going on for about two weeks, and now I feel the tipping point is near. We'll see big movement soon, but whether it is up or down will be influenced largely by the technicals this time around.
U.S.'s vacillating market
Nowadays the U.S. market been entertaining enough keep the whole world watching. The U.S. market's fickle disposition throughout the week let us see a nice rally care of Mr. Warren Buffet and then a sell-off on valentines day, care of U.S. FED Chair Ben Bernanke.
No excuse to be all out gloomy yet
With these two days as reference points, our market still seems to be tracking the U.S. major indeces but in hardly as entertaining a fashion. We ended our week dangerously close to the 3170 level that tsupitero has been warning us about. The bright side of it all is that technical analysts don't quite have an excuse to say that we're going to see a lower low. With so many investors staring at bad January index figures, the smallest things can spark a sell-off. If technicals start predicting a drop, I think even their largest critics will choose to err on the side of caution.
Green and go?
I feel that we're very close to the tipping point and it will be the technical analysts who we should listen to. We should watch to see whether technicals will say that our market either passed or failed the double test of support. After all, most fundamentals are still positive. When we hear both the technical analysts and the fundamental analysts saying good things are to come, the lights we'll green and go and hopefully all that money sitting in the sidelines will be put to good work.
Thursday, February 14, 2008
Warren Buffet's uncommon sense
I get the feeling that this guy lives for times like these. I think recessions and financial fallouts are the times when his uncommon sense works best.
I recall a comment Warren Buffet made when people were still speculating about the credit crunch. He said that while many people will suffer, there are many others that will end up much better off.
I think he was referring to people like himself. People who are always paitiently waiting for not just a good deal, but a great deal. True enough, people in the U.S. who are looking to buy homes or other real properties will find much better bargains today than they would have found last year. And I'm sure the logic can carry further and have wider application than just housing.
I recall a comment Warren Buffet made when people were still speculating about the credit crunch. He said that while many people will suffer, there are many others that will end up much better off.
I think he was referring to people like himself. People who are always paitiently waiting for not just a good deal, but a great deal. True enough, people in the U.S. who are looking to buy homes or other real properties will find much better bargains today than they would have found last year. And I'm sure the logic can carry further and have wider application than just housing.
when the market is falling, let the deals come to you
"When the market it falling, let the deals come to you." -CNBC
Such simple but great advice.
Such simple but great advice.
indicia of market undervalue
When companies are buying back their own shares of stock on the exchange, it is, in general, a clear sign of stocks being undervalued by the market. That is now the case for us. It very well speaks for itself.
Company buybacks on the PSE
Companies have been buying back their shares on our bourse. To name a few, we have Filinvest Land Inc., Roxas Holdings, CADP group, PLDT, Chemrez Technologies, Vista Land and Lifescapes, Aboitiz disclosing buybacks and the list goes on.
Disclosures published at pse.com.ph
By simply perusing the website of the Philippine Stock Exchange, one will see many company disclosures of share buybacks.
A look at FLI
FLI had an IPO last year and the price of the shares was around PHP1.92ish on the day they were offered. In their disclosures they were buying the same shares back at around 1.08. That would mean they would net almost half of their IPO price and be left with the shares in their names. How brilliant.
A Devil's Advocate perspective
It is possible that behavior like this is calculated to keep stock prices from falling further and is no more than a strategy to boost the image of the shares. However, I'm more inclined to think that that's not the case this time around because of the scale of the buybacks in terms of the number of companies doing it and the number of shares they are buying back. Assuming for sake of argument that it is no more than a mere strategy to encourage higher market valuation, companies will not risk buying back large amounts at overvalued levels. So at the very least, we'll know that the prices are at a reasonable level. That is, at the very least, even with an devil's advocate perspective.
Something to watch out for
I think behavior like this is, in this case, a good indicator that the stocks value is higher than where the market is pricing it at. Over the next few days, I want to watch for more similar activity.
Company buybacks on the PSE
Companies have been buying back their shares on our bourse. To name a few, we have Filinvest Land Inc., Roxas Holdings, CADP group, PLDT, Chemrez Technologies, Vista Land and Lifescapes, Aboitiz disclosing buybacks and the list goes on.
Disclosures published at pse.com.ph
By simply perusing the website of the Philippine Stock Exchange, one will see many company disclosures of share buybacks.
A look at FLI
FLI had an IPO last year and the price of the shares was around PHP1.92ish on the day they were offered. In their disclosures they were buying the same shares back at around 1.08. That would mean they would net almost half of their IPO price and be left with the shares in their names. How brilliant.
A Devil's Advocate perspective
It is possible that behavior like this is calculated to keep stock prices from falling further and is no more than a strategy to boost the image of the shares. However, I'm more inclined to think that that's not the case this time around because of the scale of the buybacks in terms of the number of companies doing it and the number of shares they are buying back. Assuming for sake of argument that it is no more than a mere strategy to encourage higher market valuation, companies will not risk buying back large amounts at overvalued levels. So at the very least, we'll know that the prices are at a reasonable level. That is, at the very least, even with an devil's advocate perspective.
Something to watch out for
I think behavior like this is, in this case, a good indicator that the stocks value is higher than where the market is pricing it at. Over the next few days, I want to watch for more similar activity.
Tuesday, February 12, 2008
breaking the index's fall
"Be greedy when everyone is fearful, be fearful when everyone is greedy?" -Warren Buffet
When will our market's main index break its medium term downtrend and find that foothold? With such bright and sunny skies over our local private sector, why are we so fearul?
News...what news?
All the good corporate news last week was not sufficient to have any significant upward impact on our market. On the contrary, we saw incredibly thin trading last week for successive trade days. The gloom and doom that has taken over global markets seems to scream louder than our local news of continuously increasing corporate profits.
Technical Opinions
Tsupitero says the level to watch out for is 3170. Any break below this points to only one of two things, a retest of the previous low of 2950 or worse, the establishment of a newer low.
Other technicals are telling investors to watch for a successful retest of the last support level, which I'm assuming to be 3170. Support retest seems to be the buzzword now among technical analysts.
Fundamental absence or fundamental failure
I seem to find very little fundamental analysis on our local market. I think its because, we find ourselves in a paradoxical situation. We have good fundamentals but a tumbling market. There is just so much good news on the local front, as far as the private sector is concerned, that we can say we are in an excellent position as far as fundamentals are concerned. Yet, our market keeps tumbling.
Misplaced fears
Ultimately, I think that the fear going around our market is misplaced and we will realize that very soon. When our attention returns to things like our growing GDP, better fiscal position, increasing corporate profits, we will realize that there's more value than what meets the eye in Philippine Stocks.
When will our market's main index break its medium term downtrend and find that foothold? With such bright and sunny skies over our local private sector, why are we so fearul?
News...what news?
All the good corporate news last week was not sufficient to have any significant upward impact on our market. On the contrary, we saw incredibly thin trading last week for successive trade days. The gloom and doom that has taken over global markets seems to scream louder than our local news of continuously increasing corporate profits.
Technical Opinions
Tsupitero says the level to watch out for is 3170. Any break below this points to only one of two things, a retest of the previous low of 2950 or worse, the establishment of a newer low.
Other technicals are telling investors to watch for a successful retest of the last support level, which I'm assuming to be 3170. Support retest seems to be the buzzword now among technical analysts.
Fundamental absence or fundamental failure
I seem to find very little fundamental analysis on our local market. I think its because, we find ourselves in a paradoxical situation. We have good fundamentals but a tumbling market. There is just so much good news on the local front, as far as the private sector is concerned, that we can say we are in an excellent position as far as fundamentals are concerned. Yet, our market keeps tumbling.
Misplaced fears
Ultimately, I think that the fear going around our market is misplaced and we will realize that very soon. When our attention returns to things like our growing GDP, better fiscal position, increasing corporate profits, we will realize that there's more value than what meets the eye in Philippine Stocks.
Market Snapshot: 21 points up @ higher but still relatively low volume - Feb. 12, 08
The PSEi opened above the 3185 level, slightly higher than its last close at 3179. From there, the index pushed upward, briefly breaching the 3215 level and finally settling at 3120 points at the end of today's (Feb. 12, 08)trading.
Today's volume made it barely above the Php2 billion mark at Php2,040,276,000.00, about half a billion more than yesterday.
41 stocks advanced, 44 declined and 51 remained unchanged.
Today's volume made it barely above the Php2 billion mark at Php2,040,276,000.00, about half a billion more than yesterday.
41 stocks advanced, 44 declined and 51 remained unchanged.
Monday, February 11, 2008
answering a bloggers question: "is it a good time to enter the market when the foreigners are out or just follow their lead?" -salve
Generally, Yes, but not for the faint hearted and impatient. It makes for a good medium to long-term strategy if its well thought out and researched. Note that there's a huge caveat.
Two main points.
1) Don't dare to do so, unless you are well informed.
2) Be ready to wait. This strategy is a double edged sword
Discussion:
1) Re: being well informed
a) the creation of bargains: As long as you're sure about the stock's value, then I think its a good time to buy when foreign buying is low. Foreign buying adds to the competition among buyers and pushes prices up.
b) computing the value: Without foreign buying we may find more bargains. But the tricky part is knowing the value of the companies. That may take some serious pencil pushing and number crunching. Luckily there's plenty of people doing that out there already, like brokerages and the business media.
c) the goal: We'll have to sift through the stocks to see which ones are "cheap" but have good value so we can avoid the ones that are "cheap" simply because the companies are no good.
2) As re: being ready to wait
a)few buyers means a time for easy buys but also a time for hard sells:
When foreign buying is low, people rarely want to buy. You may get good value, because not many other see it. But that same advantage may be your undoing if your not patient when looking for buyers. Big rallies in our market happen when foreign buying is high. When that will happen is something hardly as easy to determine as finding out which stocks have value.
b) relatively longer-term strategy:
The constraint in buying like this is that it could possibly entail a longer term. This won't work for short term trades.
---------------------------------------------
In an earlier post, I mentioned in passing that we may see good bargains as businessworld pointed out that foreign buying is on the wane.
I got a really good question which lead me to this new post.
"Blogger Salve said...
hi, i like what i'm reading. do you think its better to enter the market when the foreigners are out or just follow their lead?"
Two main points.
1) Don't dare to do so, unless you are well informed.
2) Be ready to wait. This strategy is a double edged sword
Discussion:
1) Re: being well informed
a) the creation of bargains: As long as you're sure about the stock's value, then I think its a good time to buy when foreign buying is low. Foreign buying adds to the competition among buyers and pushes prices up.
b) computing the value: Without foreign buying we may find more bargains. But the tricky part is knowing the value of the companies. That may take some serious pencil pushing and number crunching. Luckily there's plenty of people doing that out there already, like brokerages and the business media.
c) the goal: We'll have to sift through the stocks to see which ones are "cheap" but have good value so we can avoid the ones that are "cheap" simply because the companies are no good.
2) As re: being ready to wait
a)few buyers means a time for easy buys but also a time for hard sells:
When foreign buying is low, people rarely want to buy. You may get good value, because not many other see it. But that same advantage may be your undoing if your not patient when looking for buyers. Big rallies in our market happen when foreign buying is high. When that will happen is something hardly as easy to determine as finding out which stocks have value.
b) relatively longer-term strategy:
The constraint in buying like this is that it could possibly entail a longer term. This won't work for short term trades.
---------------------------------------------
In an earlier post, I mentioned in passing that we may see good bargains as businessworld pointed out that foreign buying is on the wane.
I got a really good question which lead me to this new post.
"Blogger Salve said...
hi, i like what i'm reading. do you think its better to enter the market when the foreigners are out or just follow their lead?"
Stock feature: Polar opposites- SCC's new highs vs. PAX's new lows
Each a member of a Philippine sunrise industry, one leaps forward while the other keeps losing ground. The numbers that tell the stories of Semirara Mining Corporation and the BPO firm Paxys are total opposites.
SCC's gain over 260%
The first time I took notice of this stock was when it was trading for about Php19-20/sh. Seeing as SCC just recently broke Php58/sh, for a 52 week high when it was only at Php16/sh about a year ago, I'm kicking myself for not having bought in earlier.
Outdoing the PSEi/Phisix
The significance of these new gains come from the timing. While indeed we are experiencing some form of a mining renaissance in the Philippines, our stock market as a whole is not having a good start to the year. SCC is moving against the flow and outdoing our main index by a long shot. Heavy favorites like PX and GEO cannot lay claim to the same success at this point in time.
Consolidation and support retests
Our index is believed to be consolidating between the 2900 and 3900 levels. Right now, we are close to the low end of that range. The market's last close was 3179, stuck within what technical analysts like to call a support retest. A second successful test of support is believed to be a sign of a possible good rally and a go signal to position short.
PAX loss of 89%
PAX on the other hand had a high of 30 about a year ago but has just found itself a new low at 3.15. Paxys has long been in trouble having been hit by a one two punch. The first hit came from the new billing methodology of its clients that reduced their dollar denominated revenues. The second hit came from the fall of the dollar, weakening their earnings from a Philippine standpoint.
SCC's gain over 260%
The first time I took notice of this stock was when it was trading for about Php19-20/sh. Seeing as SCC just recently broke Php58/sh, for a 52 week high when it was only at Php16/sh about a year ago, I'm kicking myself for not having bought in earlier.
Outdoing the PSEi/Phisix
The significance of these new gains come from the timing. While indeed we are experiencing some form of a mining renaissance in the Philippines, our stock market as a whole is not having a good start to the year. SCC is moving against the flow and outdoing our main index by a long shot. Heavy favorites like PX and GEO cannot lay claim to the same success at this point in time.
Consolidation and support retests
Our index is believed to be consolidating between the 2900 and 3900 levels. Right now, we are close to the low end of that range. The market's last close was 3179, stuck within what technical analysts like to call a support retest. A second successful test of support is believed to be a sign of a possible good rally and a go signal to position short.
PAX loss of 89%
PAX on the other hand had a high of 30 about a year ago but has just found itself a new low at 3.15. Paxys has long been in trouble having been hit by a one two punch. The first hit came from the new billing methodology of its clients that reduced their dollar denominated revenues. The second hit came from the fall of the dollar, weakening their earnings from a Philippine standpoint.
Market Summary : ouch - PSEi takes a few punches -61.65 @ thin trading -Feb. 11, '08
Another Downhill Day
The market opened slightly higher than its last close but was all downhill from there. Friday's close was at 3241.13 points. The market fell today by 61.65 points settling at 3179.48. The index fell for the fourth time in the last five trading days. The industrial and property indexes took the biggest blows falling 48.55 and 42.68 points each respectively Among the top ten most traded stocks for the day, only MWC gained from its close last session at 17.75, climbing to 18.00 today.
Thin Trading
Overall trade value was higher than what we saw in the last two trading days but still relatively thin at the Php1.566 billion mark. Last year, I was told that we were averaging Five Billion Pesos in trades daily. We're a long way from there at this level.
The market opened slightly higher than its last close but was all downhill from there. Friday's close was at 3241.13 points. The market fell today by 61.65 points settling at 3179.48. The index fell for the fourth time in the last five trading days. The industrial and property indexes took the biggest blows falling 48.55 and 42.68 points each respectively Among the top ten most traded stocks for the day, only MWC gained from its close last session at 17.75, climbing to 18.00 today.
Thin Trading
Overall trade value was higher than what we saw in the last two trading days but still relatively thin at the Php1.566 billion mark. Last year, I was told that we were averaging Five Billion Pesos in trades daily. We're a long way from there at this level.
Sunday, February 10, 2008
eyes on china
With the recent holidays, Chinese markets sidestepped the turbulence in global markets last week. The question now is, will China play catch up and spark another global sell off this week?
The SSE 180 index of the Shanghai Stock Exchange closed last at 10,894.75 points on February 5, 2008. The SZSE index of the Shenzhen Stock Exchange closed last at 16,859.64 points on the same date.
The Philippines avoided the troubles as well, barely moving up or down at very meager trade values on the days of the lunar holidays. With foreign selling coming to a halt, perhaps our own market is raring to make a rally this week. I hope China markets are raring to rally too.
The SSE 180 index of the Shanghai Stock Exchange closed last at 10,894.75 points on February 5, 2008. The SZSE index of the Shenzhen Stock Exchange closed last at 16,859.64 points on the same date.
The Philippines avoided the troubles as well, barely moving up or down at very meager trade values on the days of the lunar holidays. With foreign selling coming to a halt, perhaps our own market is raring to make a rally this week. I hope China markets are raring to rally too.
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