Common Sense Trading @ Studere Legis - A Philippine Stock Market Trading Blog

SECB: where did this all this come from

2010-06-25T17:19:00.003+09:00

Around March this year (2010), SECB was hovering around the low 50s. Now, its parked itself in the low 60s, about 20% higher in just four months.

I was very happy watching the performance of this stock but am still a bit perplexed as to how and why it's beating the other banks. BPI for one has been a bit disappointing to me. Before the last recession wreaked havoc around the Globe, BPI was trading above 60. Now, it doesn't seem like it will return to the level any time soon.

There's a similar story for BDO. It's still significantly far from where it was before the global recession.

So what's with SECB? It appears that their loan growth has been strong and will continue to be very strong. Their current projection is 10%-15% loan growth in 2010.

My broker tells me that even a conservative estimate of less than 10% loan growth shows that SECB provides good value for the buyer even at a price of Php63.00.

place your bets!

2010-06-01T16:29:00.001+09:00

place your bets!

"Place your bets!"

That's what Miko Sayo of Tsupitero.com says about the PSEi.

He said we're in some kind of no man's land because of the mixed signals of the market from a technical point of view.

Here's what I'm considering:

ICT (28.50)
ATI (5.3)
MWC (15.25)
SECB (63.00)

Here's a few reasons why:

I'm always partial to relying heavily on fundamental analysis and the fundamentals of these companies are very good.

I like companies that are engaged in businesses that are easy to understand.

ICT and ATI in particular because of the improvements in container traffic. If not for the recent trouble in the euro zone, I think these stocks would have hit the roof by now.

MWC because they enjoy a guaranteed rate of return as a utility company and the rainy season is coming. With el nino out of the way, MWC will be smiling.

SECB because they're numbers are just plain awesome.

Finally, i verified these picks with information from my broker. The most common sense tip of all: ask the experts. :)

cheers to the Philippines

2010-05-28T12:18:00.002+09:00

After having a relatively uneventful and peaceful election, with a clear Presidential front runner, the Philippines has yet another thing to be very happy with.

7.3% GDP growth in 1Q2010.

Pretty cool. It was enough to bring a tiny rally even as the market was weak early yesterday.

spooky figures

2010-02-05T10:03:00.000+09:00

The DOW is down 4% in 2010.

During the last session, DJIA fell 2.61%;
NASDAQ fell 2.99%;
S&P 500 fell 3.11%

CNBC reported a "brutal selloff".

The PSEi has a tendency to track the american market so we're likely to see another correction. What has my attention is the 10,000 point psychological mark in the DJIA. For a few moments before trading ended it fell below that level but quickly jumped back up to settle at 10,002.18 points.

If the DJIA doesn't hold above the psychological 10,000 point mark, I think there's a good chance it will spark a large correction in the three major indexes.

A large correction in the U.S. will probably spook the Philippine market into a sizable correction as well. After all, we've seen a rally that lasted around nine months already. As the saying goes what comes up, must go down.

Getting ripe for the picking

2010-02-03T10:53:00.002+09:00

"Stocks post worst decline since August ’09" @ inquirer.net

It was reported that: Heavy selling cut 2.4% off key price index. The report used the word "bloodbath."

Miko Sayo of tsupitero.com says that Feb - Apr is normally ugly for the market. I guess this is a fitting start.

I wouldn't be surprised if the "ugly" Feb - Apr period extend a bit due to the May 2010 elections.

For those looking to start some long positions, the prices for entry are getting better. I wouldn't jump the gun yet, though. I'd wait for a no-brainer entry point.

2010, the year to buy

2010-01-25T15:58:00.001+09:00

2009 saw a long rally of the stock market and yet it felt all too soon for me. So I sat on the sidelines and tried to put together a small stash of money from the bonuses I get from time to time. In hindsight, that decision seems to be getting better and better.

2010 seems like it will bring good buying opportunities for long positions.

Now, we have the real information with regard to the financial figures surrounding the recovery of the global economy at hand; and we also have the ability to think outside of the euphoric charm of the reversing recession

"Be fearful when everyone is greedy and be greedy when everyone is fearful" -Warren Buffet

I think the 2009 rally of the PSEi was a bit premature, i think people got greedy. Now, the numbers are in the red and it's spooking a few folks.

However, if we look at the fundamentals of Philippine companies, there are a lot of good ones out there. Now that the trend of the PSEi is a bit more sober, we'll have time to do some cherry picking.

Oh yeah, there's also an election coming. Local and national. That kind of political atmosphere always seems to bring stock prices lower.

When recession turns into recovery

2009-08-11T15:23:00.003+09:00

Will the U.S. economy's recovery be good for the Philippines?

The Philippine economy performed well during the crisis, will it do even better during the recovery? I would hazard a resounding yes. Here's why.

1. We'll see an increase in demand for minerals
2. Our Business Process Outsourcing Industry will remain strong
3. OFW remittances will keep on growing

Number two and three, BPO and remitances, are the reasons why we are doing relatively well during this global financial/economic crisis. Those are no-brainers and have probably already been priced into the market.

Number one is what will shake things up. When demand for minerals increase, mineral rich countries like the Philippines have a great opportunity to make good money.

What does all this mean for common sense traders?
The languishing mining stocks will return to the new horizon. Before this global crisis, mining was under a spotlight. When the world pulls out of the recession and begins its recovery, I forsee a strong and steady increase in the value of local mining shares.
____________

Note though that PX is is oversold at its present nine-ish price. This is probably due to speculation over news of a new investor coming in.

a beautiful picture in hindsight

2009-07-03T11:11:00.001+09:00

The past few months have been great for the PSEi. From 1745, the index climbed all the way to 2626 in the last three months.

That can make a lot of people excited. Not me though.

The obvious conclusion is that gains like that are NOT sustainable. I don't have to whip out my calculator and formula book to figure that out. This index cannot keep this pace up. As we haven't seen much of a correction yet, I think its coming. Soon.

Time to sell. Time to hold. Not a time to buy.

gmanews: RP bourse outperforms ASEAN stock markets

2009-04-13T18:35:00.000+09:00

This is interesting. According to GMAnews.tv, the PSEi has done better than its neighbors. This really speaks well of our fundamentals.

Click here for the full article.

is it time to buy?

2009-04-13T11:29:00.001+09:00

Markets around the world have seen good gains over the past weeks specially in Asia. When the numbers are in the green, there is always a lot of excitement generated. So with everyone wondering if its time to buy, i can't help but wonder the same thing myself.

I don't think its really the time to be buying quite yet. I would recommend that we still be cautious. I'll maintain my current strategy of small buys stretched over a long period.

Too much excitement
It's been a while since we've seen good numbers and I think this might cause the markets to get ahead of themselves. So far, the PSEi remains very responsive to the U.S. indeces so I remain attentive to what's happening over there. While the so called "green shoots" are emerging from the devastated American Economy, I don't think all the bumps are already behind.

Credit Card fallout
One thing I'm very concerned with is the Credit Card fallout that is hanging over the American Economy like the sword of Damocles. Even without very detailed specifics, we know that the American consumer uses credit cards for a very large part of their purchases. When a job is cut, credit isn't. So what happens when the droves of jobless start defaulting. We'll again see some ugly figures and have to digest them. It may not be such a big deal from a macro economic point of view, but something like that can really rattle the markets. It's coming and I would like to wait for that to pass before I make some big buys.

Waiting game is coming to an end
Over the past months, I've read and read and read about whether its a good time to buy. Most articles say the same thing. There is tremendous opportunity now. Timing and selection is the key. That kind of vague advice isn't really very helpful when it comes right down to making specific purchases but considering that around November 2007, the chorus of the blogosphere was sell, sell, sell and that the experts were saying similar things makes me feel good even about such vague advice. I sense that the time for waiting is coming to an end. The window of this "tremendous opportunity" will soon close.

is it a breakout?

2009-04-02T15:15:00.002+09:00

When the index finally woke up from its sideward slumber, did it indicate that it was ready to trend upwards?

I'll leave that answer to the technical experts. See tsupitero.com.

What tickles me now is that the good numbers of our index are inebriating the investing community. Will it trend up? I don't know, but they're saying there's good chance.

when will it end?

2009-03-18T20:56:00.001+09:00

The index may as well be a straight line. The trend has been sideways for so long, it's getting boring.

I guess we can just be glad we're not seeing the market values plunge like it is for most of the developed world.

2009-01-13T16:03:00.000+09:00

"This will not be a good year but it will be more stable than 2008 and there will be occasional substantial bear rallies. Inflation is declining and another interest rate cut by the central bank is expected. " -Ron Nathan inquirer's "bearbull"

U.S. indeces take a tiny drop while Japan takes a beating

2009-01-13T15:46:00.002+09:00

While U.S. market indeces took a few steps down, Japan's market dropped a whopping 4.8%.

The PSEi inched down and settled a mere 1.79 points from yesterday's close after ever so briefly punching past the psychological 2000 level at around eleven this morning.

The dow was down 1.46%, the nasdaq by 2.09%, the s&p by 2.26%.

fuel for thought

2009-01-09T17:10:00.005+09:00

A blogger named Steve Austin (of oilprice.net) wrote:

"It took only 5 months for the price of oil to plummet from $150 to under $40 in the second part of the year. Meanwhile oil consumption did not even decrease 10%."

If he has his facts straight, then the oil price will be back with a mighty vengeance. The low price is necessarily negatively affecting production capacity. Supply will keep going down at these low price levels.

He also said that oil is now being sold below the cost of production. That adds another dimension to the bad news for oil consumers. This means that many of the relatively small players will close down and the ones that survive will have less competition. Less competition puts less downward pressure on the price.

Let's enjoy this happy breather while we can. :) Hopefully by the time oil starts to surge we'll have more energy options at our disposal.

PSEi
As energy prices affect the outlook for stock prices, we should be mindful that the current strength seen in the PSEi is still very vulnerable. The low oil price is one of the factors that has allowed the market to climb back ever so close to the 2000 level. Let's not forget how devastating the oil price can be.

Oil was traded recently at $42.30 (January, Friday 9 2009 - 03:20:17).

Fitch keeps RP's outlook at 'stable'

2009-01-09T10:29:00.002+09:00

Another reason to bet on the Philippine Economy

The Philippines along with China and Indonesia were singled out by Fitch managing director James McCormak as the only countries that were not on Fitch Ratings' negative watch.

watch of for these long weekends in 2009

2009-01-09T10:19:00.005+09:00

The stock market loves its long weekends. Here are some to watch of for in 2009.

Araw ng Kagitingan April 4-6    3 days
Holy Week    April 9-12      4 days
Labor Day       May 1-3      3 days
Independence Day    June 12-14      3 days
National Heroes       August 21-24    4 days
All Saints/Souls      October 31-Nov 2 3 days
Bonifacio Day    November 28-30   3 days

is megaworld at a bargain?

2009-01-03T15:17:00.002+09:00

As one of the shinning stars of 2007, Meg was pushing past Php4 per share. It was last traded before Christmas at Php0.66.

It came quite a long way down. Is it at a bargain? Megaworld seems to think so. In a press release last year, they said that they expect P1.4 billion in sales revenues from its fifth Greenbelt-area project. It is dubbed the Greenbelt Madison. The 31-story building will rise along Salcedo St. in Legaspi Village, Makati City.

A couple of weeks prior to the press release on November 25. They bought back some 2,100,000 shares at 0.5028. After the transaction, 20,510,226,901 shares remain outstanding and 131,420,000 are in the treasury.

Does that mean that they put their money where there mouth is? I don't really think so. 2.1M shares is barely a drop of dew on a rainy morning and thus is not conclusive of their position.

Nonetheless, I personally like this stock. It's a company that appears to have had rode the wave of the sunrise BPO industry rather well. Do I think its at a bargain? Yes. I do.

what will happen to stocks for 2009

2009-01-03T14:49:00.003+09:00

I do not see a coherent consensus of what will happen to the stock market in 2009.

What I have noticed are the following:

1. The world is watching the U.S. and China very closely.
2. The consensus is that there is no consensus

U.S. and China
The U.S. is where this all began. World markets have spent 2008 following the lead of American markets. My own opinion is that the some of the usual suspects will break away. As businesses begin to feel the real effects of the changes in the economic environment of the world and see clearly what it does to their balance sheets and income statements, confidence will be restored to where it should be. The fact is, America isn't the world and if America continues to suffer economically in 2009 not everyone will.

No consensus
There's talk of a rebound in the third quarter while there's also talk of the S&P 500 falling to 500 and staying there at years end.

How will the PSEi look by the end of 2009? I wish I could tell, but what I do know is that the Philippine economy is set to weather the storm in a manner far superior to the developed world. The long and the short is that the outlook for BPO is still strong, remittances are still poised to grow, albeit slower, the Banking Sector is guarded by regulations from the lessons of 1997 and the list does go on.

Thus, even if we can't see where the PSEi will be twelve months from now, we know that the Philippine economy is a logical bet in the long run. Stock prices are low so all we need now is some good intel on which ones are at a bargain and which ones are are cheap in reflection of their true value or lack of it.

last week went pretty low!

2008-11-23T20:02:00.002+09:00

This was the chart for friday's trading. I was surprised that it went that low already. Anyhow, I don't think people are fretting too much over the market anymore now. It seems to be a foregone conclusion that it will go pretty low. I wonder how this week will be.

is it the "great depression" all over again?

2008-11-20T14:02:00.002+09:00

I've seen a few lines in the news saying things like its a recession like none other since the great depression in the U.S. Now that Japan has slipped into recession, it's coming closer to home. What will a trader do now?

Looking at the numbers and seeing that the dow is falling below 8000, Asian stocks are down to a 5&1/2 year low and the PSEi is lingering below 2000. It's not a good thing for most people.

But for the enterprising individual there are great buying opportunities ahead. Since most fundamentals have not swung so drastically as the numbers reflected in the stock market, there are already bargains out there. However, how the weakened global economy will change the way businesses are running in this country will be evident only after around six or seven months. I think this is why the consensus among investors and other stakeholders is that the real bottom has yet to come.

the long way down

2008-11-09T20:08:00.003+09:00

The PSEi has made a long drawn retreat for about a year now. The levels we see were far from just 12 months before.

Many times I'd be watching the market and would feel like it was about to turn. It looks like we're still in the middle of a long way down. Nonetheless, the consensus seems to be that Philippine Stocks are largely oversold. The fact that bargain hunting is not too aggressive even at these levels speaks loudly of the attitude that prevails. The economy of the world is slowing and we are not sure of the extent that it will effect the Philippines.

Common sense tells us that it is possible for the oversold levels we see to be great bargains today but expensive tomorrow depending on how the economy may change the story.

However, I still think that these are the times the best investments can be made. I'm eyeing MWC (Manila Water Corp.) and FPH (First Philippine Holdings). MWC has a business that is fairly easy to understand and a sunny outlook even in a slowing world economy. FPH's fundamentals have changed little but the price has fallen ever so dramatically from its highs above 80 within the past fifty two weeks.

the psei barely holds above 2000

2008-11-05T21:40:00.002+09:00

The PSEi closed at 2006.21 points. Today's close was up 3.17 points from yesterday.

apetitite for stocks still low but bargain hunters are active

2008-11-04T14:46:00.003+09:00

The numbers say it all. The world's appetite for equities remains low. The Philippines is no exception.

When the PSEi dropped to around the 1600 level, it didn't stay there long. That looks to me like a lot of active bargain hunters trying to cash in on a level that is quite obviously highly oversold.

With the world's appetite for stocks at very low levels, the opportunity for bargains is tremendous.

breaking below 2000

2008-10-24T15:03:00.002+09:00

The PSEi closed today's trading session at 1,953.49 points. The psychological 2000 level was broken.

I don't see this as a surprise and I don't think anyone who has been watching the market lately would either. We had it coming. While it is nice to see markets rise, I think that it is in times like these that the real opportunities arise.

Not all who see the opportunity can afford to take advantage of it while not all who can afford to take advantage of it can see the great opportunity.

Lots of stocks are cheap and getting cheaper. Caution is necessary as many stocks cheap for a reason. Finding the diamonds in the rough is the key. Common sense makes simple and strong business attractive, specially the ones we are very familiar with as Filipino Citizens.

I like MWC, JFC, RLC, BPI, PX, TEL, SMC, BDO, ALI just to name a few...

plenty of time to pick and choose

2008-10-14T11:04:00.002+09:00

The market is a scary place to be investing in now. As a result, those that have the guts or smarts as well as the money to invest in stocks have a good amount of time to choose what to buy.

Because of the prevailing fear and uncertainty in the market, we cannot expect large sustained rallies quite yet.

Philippine market makes a small rebound (+20.95)

2008-10-14T00:42:00.002+09:00

With value turnover at Php2.2B, the PSEi climbed 20.95 points settling at 2118.75.

Tsupitero thinks that the market below 1900 will be largely oversold. Will it go that low?

Considering that it fell so quickly, maybe not right away. The traditionally bullish fourth quarter is coming as well, so that's another factor against it falling below 1900.

Nonetheless, I'm already pooling some more funds to make a few year end purchases. I really believe that a few smart moves at a time like this can achieve handsome rewards. It's a buyer's market. :)

Dow now below 8500

2008-10-12T23:11:00.002+09:00

About a year ago, the Dow was pushing forward around the 14000 level. It was an exciting time.

The Dow closed last week below 8500 at 8451.19 points. Will the PSEi take a cue from that and drop below the psychological 2000 level?

The PSEi closed last week at 2097.80. down by almost 200 points amidst some recovery in Asia.

PSEi approaches the psychological 2000 level

2008-10-10T14:44:00.005+09:00

U.S. Free Fall
The dow is on a free fall. Having already fallen below 9000, analysts believe it may even fall to the 7500 level.

PSEi & Asian Markets join the fall
The PSEi closed today at 2097.80, down a whopping 190.64 points with trade value at a little over Php3B. Why are the markets moving down so quickly? As far as the dow and other American indexes are concerned, I understand why. The credit crunch is really taking its toll on their economy. But what is really puzzling for me is that Asia has been joining in the nosedive. I haven't come across a compelling argument that Asia will fall into a recession.

China and Japan
I know that China is feeling the heat now but the consensus among economists points to a slowdown not a recession. If there will be a country in Asia to go into recession, I think it would be Japan. Simply because of their close ties to the U.S. and the major effect that the negative numbers in the automotive industry will have on their economy as a whole.

Middle Income Countries in danger
The middle income countries that export mostly to the U.S. are susceptible as well. However, many of such Asian countries have plentiful foreign reserves. If Asian countries play their cards right, we're looking at slower growth, but growth nonetheless.

Still in the green: the Philippine Economy
As regards the Philippines, the most conservative estimates I've seen are still in the green. The Arroyo government still sticks to the projection of somewhere over 4% in growth. The lowest I've heard is a projection of over 3%.

Trading Action
With the market now approaching that psychological 2000 level, I think that fundamentals will justify buying at around the current levels. However, the volatility calls for caution. Many investors say this is neither a buying or selling market. However, I think small purchases at regular intervals still seem like the best way to go to building a solid long position.

The drop slows. PSEi down by 19.30

2008-10-09T17:33:00.004+09:00

The PSEi closed today at 2288.44. Maybe tomorrow we'll be in the green again as the index is down by a lot less than yesterday. Volume is still around the Php2B mark at Php2.236B.

I found it ironic that the financial index was the only one that went up today.

snowballing PSEi; down by 116.45 points today

2008-10-08T19:59:00.002+09:00

Recession is really worrying Asia. The theory is that middle income emerging economies will join the economic problems of the U.S.

Is the Philippines included? The numbers seem to lean on a resounding yes. I think the fundamentals are different however.

As far as banking and real estate is concerned, I think the lessons learned back in 1997 are still clear. The industry players have adjusted so as not to let history repeat itself. Note also that we can probably still count on large remittances from our biggest export, labor. This will keep our foreign reserves strong. It is well to note that our OFWs send dollars because its convenient but if need be they can send a host of other currencies.

While certain agricultural exports will get weaker as U.S. based demand wanes, we're still seeing growing demand from other parts of the world. This logic may even be stretched to other areas of Philippine exports. While China and India have monopolized the spotlight as new and strong sources of demand, how about the Oil rich Arab nations? How will their ever increasing wealth affect the Philippines? That's a factor worth considering.

Things aren't too clear now and that's just it. I wouldn't bet against the Philippine economy just yet.

another large drop today; PSEi sheds 73.54 points

2008-10-07T13:38:00.002+09:00

The worries of worldwide recession are resurfacing.

Value turnover was P2.3B, with the PSEi closing at 2424.29. Other Asian markets made a bit of a turnaround today after the Bank of Australia cut their interest rates by 100 basis points but the FTSE was down by over 400 points.

The Nikkei fell below 10,000 at one point. The French market saw its biggest single day drop. The Dow Jones closed below 10,000 points.

...maybe -73ish isn't so bad. Hehe.

the verdict is in: -66.68 by the PSEi

2008-10-06T13:46:00.002+09:00

World markets moved down today. The PSEi was no exception. The Philippine market index closed at 2499.53. It appears that the actual implementation of the U.S. bailout was not as impressive as when it was still a plan being hatched.

On the bright side, Oil fell below $92. That should be good for our inflation. I hope our pump prices go down to the low forties very soon.

down on friday

2008-10-04T10:45:00.002+09:00

The PSEi closed about 40 points lower.

+43.24 for the PSEi

2008-10-02T20:46:00.005+09:00

The PSEi went up to 2,612.89 points, jumping 43.24 points. U.S. markets closed rather flat. The dow was still below 11,000. We're doing considerably better over here.

Nonetheless, I still think Philippine Stocks remain undervalued by the market. I'm really itching to buy more while prices remain rather low.

N.B. Whilst everyone is busy being fearful about their money, and others are busy looking to be rescued, Warren Buffet is out shopping. He just bought about $3B in value of GE's shares plus an option to acquire more.

"Be fearful when everyone is greedy, be greedy when everyone is fearful."
-Warren Buffet

more foreign buying

2008-10-02T20:11:00.002+09:00

A couple of months ago, Ron Nathan of the Inquirer noted that for as long as foreign buying is negative, we aren't really going to see a bull market.

Now the foreign buying might be back in the green. Even while the global markets were falling at record levels for a single day last tuesday, the PSEi shaved only a little over thirty points. On that day, we saw net foreign buying.

The PSE is among the top performing markets in Asia. Considering how troubled the U.S. markets are, we seem to have a really nice alternative back home and the world may finally be taking notice.

-37.93 for the PSEi isn't bad

2008-09-30T15:56:00.002+09:00

I was surprised to see that the PSEi fell only 37.93 points today. Wall street plus major asian markets were reacting by making record drops in response to the the failure of the U.S. Congress to pass the law enabling the bailout.

I'm of the opinion that Philippine companies are sufficiently decoupled from America from a fundamental standpoint. Yet, our market reacts to the U.S. market and often tracks its movement absent any major local event.

Could this mean that buying behavior in the Philippine market is now less influenced by the U.S. market?

I'm more willing to speculate that local stocks are just way oversold and really "cheap" compared to their true value. If I had the money to spare, I'd be buying Philippine stocks left and right.

PSEi shed 109.96 points

2008-09-15T17:02:00.003+09:00

The PSEi closed monday at 2536.16 down 109.96 points from friday's close at 2646.12. This may very well have set the tone for the whole week.

I heard that the words dead cat bounce were being thrown around last week to describe the recent rally of the PSEi. It looks like they were right.

worsening U.S. economy; in a resilient world -?

2008-09-09T23:55:00.003+09:00

U.S. is running out of options to stop recession. That's was the headline on cnbc.com. With the U.S. headed for more trouble, i'm wondering if the world economy is resilient enough to avoid being dragged down.

I think it just may be. I was mulling over this today and it seems that with oil going down, countries like the Philippines have much better prospects even with a faltering U.S. economy.

Many writers have already argued before that American consumption no longer takes so large a slice of Philippine exports and that ultimately we (the Philippines) are sufficiently decoupled from the U.S. so as not to be dragged down with them into a recession.

In light of the growing demand of China and India for many goods and services we provide, that seems quite true. Another factor is that we may soon see countries like the Philippines tapping into the markets of rich oil producing countries.

Anyway, it's a nice thing to think about. I haven't had much time to fully convince myself about this though. Suffice it to say, given that more and more people believe America is in more trouble than we see right now, it would be nice to know if indeed the world's economy will keep chugging along even as our American friends work through a recession. Specially if we're thinking of putting more money into Philippine Equities.

a chance for the market to begin a strong rally

2008-09-05T08:45:00.002+09:00

Tsupitero of tsupitero.com believes that there's a chance for our market to begin a strong rally and the indicator is if the PSEi hold above 2632 for this week. He had a fancy chart on his site that I pretended to understand and he said something about a white candle. Anyhow, his magic has been hitting the bullseye so he has my attention.

Though Technical Analysis (TA) isn't really my cup of tea, I know that a significant part of the market relies on TA. I'd like to know what they're thinking.

not quite the rally i expected

2008-09-05T08:40:00.002+09:00

The Philippine Daily Inquirer noted that buying may have slowed do to the coming inflation data. Even after the large drop in U.S. oil and the big surge in U.S. stocks, we only saw the PSEi jump past the 2750 mark, up only about fifty points from two days before.

Not quite the rally i expected.

oil drops over $8.00 to $108; PSEi likely to rally

2008-09-02T22:46:00.002+09:00

We're likely to see the PSEi rally and track the expected large gains in the U.S. stock market, the dow currently at +2%, S&P at +1.85% and Nasdaq +1.36% in early trading, due to oil dropping over $8.00 to settle at the $108 level. The drop is reported by CNBC to be due to the easing concerns over hurricane gustav.

The PSEi closed at 2708.25 monday, Sept. 2, 2008.

here come the "ber" months

2008-08-31T20:21:00.002+09:00

The forecasts for the end of 2008 have not improved. But for the meantime, we are enjoying a reprieve in the rise of commodities and even some rollbacks in oil. These are great things for our economy as a whole.

As the "ber" months approach, what can we expect from the PSEi? Even the most sophisticated analysts cannot say with certainty. Tsupitero of tsupitero.com com sees the PSEi is in somewhat of a state of limbo.

With that in mind, I'm still looking for good opportunities to buy. Compared to last year, many of Philippine stocks are discounted. Given that investors are spooked, and money has been consistently flying to safer havens like bonds, there is little attention being given to equities.

Why do I like to against the flow in times like this? Well, as long as we keep investing manageable amounts that we're willing to leave over the long run, we can ride out the dips and cash in on growth which can be reasonably expected over the long term. Notice, our economy is still growing, albeit slower than last year. Many companies are posting lower gains than the previous years, but GAINS nonetheless.

taking a breath

2008-08-21T19:44:00.002+09:00

Low trade volume over the first two trading days of this week indicates that the market is taking a breath.

Tuspitero of tsupitero.com said last monday (18th) that he believed we'll likely see sideways movement or a correction. He discounts the likelihood of a strong rally before either of those happens.

As we've seen some correction already over the past two days, it looks like he's right on the money this time. Whether the PSEi eventually ends up rallying up and beyond 2900 or comes down below 2500, in the meantime we've got a moment to decide where to place our bets.

I don't bother crunching numbers much but considering the world economy and the mixed numbers as regards corporate earnings, I'm still bearish. But who knows, as the silver linning of the slowing world economy is emerging to be the drop in demand for oil we there may be a few more surprises in store for us.

OIL and the WORLD ECONOMY: is it a chicken and egg game?

2008-08-19T21:31:00.002+09:00

Pablo Gorondi, a writer for the Associated Press noted that the oil price is going down and will be facing additional pressure because of the slowing world economy.

Wasn't it the rising price of oil that was slowing the growth of the world economy? So which caused which? Was it some kind of a returning domino effect? hehe... At any rate Oil fell as low as $111.78. That's more than enough for a few more sighs of relief and smile to top it off. :)

GEO: What's up with "the people's stock".

2008-08-19T14:33:00.002+09:00

The much loved, hyped and traded GEO was dubbed as "the people's stock" on the blogosphere. It was popular, affordable and easy to buy and sell. Why was it so loved and where is it now?

Why was it so loved?

Well, as GEO would hover around the Php2.00 to Php3.00 level it was really easy to buy. At that level, most brokerages would let you buy it by the thousands. So with only a minimum of Php2k to Php3k you could already be trading it actively. The rise of internet trading had plenty to do with it. In addition, it would fall daily in the top 20 most traded stocks.

Where is it now?

Last close: Php0.88; It didn't even make it to the top 20 most traded. Even during its glory days at "the people's stock" that company wasn't pulling anything out of the ground. The latest buzz is that they inked an exploration deal with listed Nihao Mineral Resources and Chinese mining firm Jiangxi Rare Earth and Rare Metals Tungsten Group. No details have been released.

A common sense reason to buy it now
If you choose to be a contrarian it would be better to buy into this stock now while no one is looking. The moment they start digging, it's price will start rising. "Buy low and sell high" they say. This looks low to me at Php0.88. Note though that this has recently gone down as low as Php0.60+.
But then again, why buy into this company. If you haven't already, give it plenty of thought before you do. I direct this post more to those that love trading it already.

It's well to note for everyone that the fact that mining still has handsome prospects in the Philippines should direct us to have even a part of our portfolios in mining. This is a happy candidate. It also helps a lot for our peace of mind that the Puno's have a hand in this cookie jar.

signs of an ever shrinking world

2008-08-15T02:17:00.004+09:00

Cheaper gas = higher stock prices. The oil price has been falling due largely to shrinking demand. Much of the slash in demand is stateside in origin. Americans are reacting to the rising prices by driving less.

CNBC reports that "U.S. drivers have turned to public transportation and shortened trips in response to high gasoline prices, a major factor in oil's drop of more than $31 a barrel since hitting a record over $147 per barrel last month."

I thank the American citizenry for reducing their time behind the wheels of their gas guzzlers. Not really because it boosts stock prices but mostly because its better for the environment. But yeah, it has a nice effect on our stock prices and I like that too.

ALI buying back shares is a good old common sense buy indicator

2008-08-13T21:04:00.002+09:00

Ayala started a buy back program today to repurchase around Php3billion worth of ALI's shares. I like to piggy back on behavior like this. When a company buys back its own shares it sends a clear message. First, that in their opinion, their long term outlook is good. Second, that they are willing to put their money where their mouth is.

Of course a devil's advocate will argue that maybe that's exactly what they want investors to think... But if we think that way, we'll go around in circles. I like to keep it simple.

Besides, ALI has been around for a long time and based on their track record, they aren't the type of company to do that kind of thing. But then again even if they did, I'm sure they can wing it and make it work well for the shareholders. :)

why the boost in stocks?

2008-08-13T01:01:00.003+09:00

I'm wondering why we've seen a few rallies at the PSE lately. I've been looking at the news and haven't seen anything noteworthy that would boost stocks. Our basic fundamentals don't seem to have changed much except of course that the oil price has been falling in the world market.

Is oil that big a factor? What about inflation. Doesn't it look like its here to stay?

Ron Nathan seems to be of the opinion that things are still bad. He even quoted someone saying that 2009 may be worse than 2008 for the global economy. Ron soberly reminded us about the housing problem in the U.S.

While I don't want to concede quite yet that 2009 will be worse for the Philippines, I would agree with Ron's point in that we haven't seen the end of the credit and housing crisis which really was what started the jitters mid to late 2007. Since then our stocks (and sadly our portfolio's) have been steadily going down. Why the boost now?

Tsupitero hasn't updated his website so I don't really know what's going on with the number crunching. :p However, since foreign selling is still going on we have to look within our shores for the reason. My guess is still that the bottom hunters and the like have been making bets. What their reasons are elude me. So with that in mind, it all sounds like a house of cards.

I'll wait till the PSEi falls below 2500 before I go shopping again.

PSEi is rallying

2008-08-06T11:50:00.002+09:00

I woke up while the PSEi was in the middle of a rally. +80 something. I checked foreign activity and yesterday they were net sellers for the seventh straight day.

I'm curious now about today. Is this big rally propelled by local sentiment?

My guess is that the bottom hunter's have placed their bets. Plus its a good time to position before corporate earnings reports come out.

So based on that and on this year's performance for the PSEi, I'd remain pessimistic. I think this rally could very well backfire and snowball a downtrend-if it doesn't last. And if it does last, at best it may take us into a sideways trend.

I had been hunting for bargains lately, but at current levels I'm more inclined to watch. I put up the "sale" sign when it was below 2500 now I'm putting it away. I wouldn't be surprised though if the PSEi takes a few trips back down that level within the next few months. I'll be saving up for that.

resistance shmesistance

2008-08-04T21:20:00.005+09:00

Every analyst seems to have his own "resistance" and "support" levels. I don't bother making my own. After all, this is just my hobby and I like to position long. What I do is I just ride off of other people's analysis. There are many people out there who love crunching the numbers and don't mind publishing their thoughts. My favorite is still tsupitero.com. He's usually spot on.

The inquirer quoted citisec saying that resistance is at 2630 and that we're looking to see consolidation this week. Tsupitero placed his resistance at 2600.

The market closed today at 2599.99. How ironic.

cheers to the rally

2008-07-30T18:39:00.002+09:00

The market is only less than twenty points shy of its resistance at 2600. Tomorrow will be interesting. Will it break above and finally break the downtrend and possibly climb to 2900? Or will the PSEi disappoint all of us again and accelerate the downtrend?

Short trends cause too much excitement and anxiety for my taste so I won't bother with making an intelligent guess. Right now, I'm just enjoying the show and looking for good entry points for a long play.

put up the sale sign!

2008-07-29T14:29:00.002+09:00

No one is looking but the "sale" sign is all over the stock market. The saying goes: "Buy cheap, sell high." I think they're cheap now. I want to buy and here's why:

First, Total trades on the PSE have been staying below the Php2 billion mark. In 07 it often lingered around Php5 billion. It looks people aren't interested in buying stocks right now. Too frightening a time I guess.

Second, Just a few weeks ago, the public ate up the government bonds that were offered and bidding was closed ahead of schedule because of the massive pick up.

What does that tell me? People are scrambling for a safer place to put money. This leads to a generally very low demand for large volumes of already discounted stocks. Sounds like a good time to buy. The caveat here though is that the trend is downward and nobody really knows when it will turn. So prudence will lead me to buy in trickles and with the long-term in mind. No aggressive moves for now.

blood on the market?

2008-06-12T11:36:00.003+09:00

"Buy when there's blood on the market" so the saying goes. Now that it looks like there's blood on the market or that there will soon be. Where should one look to make purchases? There's also that saying that crisis is opportunity. So where are the opportunities now?

Let's have a look at the root of the crisis to see.

Subprime mortgage
This one's a no-brainer. This is the reason why the first six months of the year were expected to be painful. But amidst all the fuss over the U.S. subprime mortgage, who would have thought that there would be another cloud of gloom that would overshadow that problem and make it seem pleasant.

Rising Oil
The rise in oil prices is changing the world. If it's here to stay we're going to have a lot of adapting to do. Companies within industries that are dependent on oil will feel the brunt while those that can decouple from oil dependence can potentially reap giant rewards.

Food Crisis
With a lack of food or a perception of a lack thereof, the prices are going up. That's bad news for consumers but good news for those that can produce food at low cost.

Shrinking disposable income
The biggest bogey showing up in light of these changes is the shrinking disposable income of consumers. Basic necessities will take the spotlight.

So what's a good company to buy into?
I'd look for companies that don't depend on oil or that use oil efficiently as well as those that provide necessities. What are these companies? I'm looking out for them and will post what I find soon. Off the top of my head, JFC maybe... historically they weather economic downturns pretty well as the richer classes go back to good old jollibee. Pharmaceuticals also seem like a good choice. Whether we have plenty of money or not, we will definitely be buying meds. Mining is still the same great growth industry we knew last year so I'll keep my eyes on companies like PX, GEO "the people's stock" and AT.

For now i'm consider buying JFC, PNB, MWC, ATS but that's another story all together.

ouch! MER closes at Php61!

2008-06-03T15:22:00.003+09:00

All the attacks on Meralco have not been kind to its stock price. This is a good illustration of how market perception is the main driver of the stock market. The fundamentals haven't changed yet, and even if they do, I don't think they will change much. With the stock price all over the place over the past months, I see only two major concerns, only one of which I find to be worth any serious thought.

The only major threats I'm considering are
1) government takeover 2) private industrial power supply.

Anent the first concern, it seems government doesn't really have that much determination to gain control over Meralco. I think it's because they know they can't really bring rates down by gaining control of Meralco. While they blame Meralco, I'm sure they know the real culprit for high energy prices in the Philippines isn't Meralco. As government doesn't have a reputation of effeciency, any rumor of a govenrment take over can send many investors scurrying away for a safe haven.

The second concern of mine is one that I believe is more likely and has great potential to hurt Meralco. Major industry players have hinted that they are considering supplying their own power. If I were in their shoes, I would seriously consider the same. If the large industries choose to supply their own power, that will significantly hurt Meralco's customer base. Industrial customer's account for a major portion of Meralco's revenues.

This stock hasn't failed to provide excitement, both the good and the bad kind. I doubt that will stop doing so.

Anyone looking for a risky bargain? Here is one. Remember this stock price was pushing twice it's value late last year. Since then, Meralco's profits have gone up.

-31.05 for the Psei @ Php2.3 Billion value traded -May 29, 2008

2008-05-29T16:47:00.002+09:00

The composite index closed at 2802.22, May 29, 2008.

Looks like the demand for Philippine stocks wasn't strong today. Maybe Philippine investors are joining the band wagon and riding the bull market in oil. Hehehe.

the retreat of the oil prices

2008-05-29T15:52:00.003+09:00

It's not retreating yet, but it will. Sooner or later.

CNBC's Keneth Stier thinks it may be sooner. He thinks oil prices may be nearing a peak.

I'm not sure if were near that peak, but I'm sure that the price cannot be sustained at these levels. People will adjust and adapt. Habits will change and the world's love affair with oil will fall from its current glory.

Here's a few reasons why i'm of that opinion.

Changing perception
On CNN, I saw a program citing interviews implying that Americans are starting to dislike their large cars and are acceding to a general opinion that oil will go up, not down in the long run. Keneth Stier notes that the road loving Americans have reportedly been driving fewer miles.

Adaptation
In Europe, a club called Street Car was invented. It is like a carpool on a grand scale. A very complex car-sharing system that is somewhere in between public and private transport.

Reality
It won't take an analyst to call this oil's bull market a bubble. Speculation is what's driving the price now. When the slowing demand starts to manifest itself more clearly through statistics and the world's supply catches up, the easy to spook speculators will pull their money out of oil and dump their hoards.

low trading volume continues

2008-05-28T23:59:00.002+09:00

Only a total of Php1.5 billion shares were trading in the Philippine Stock Exchange today (May 28, 2008). The composite index went down by 22.71 points, settling at 2833.27.

Bummer. When is that rally going to come? All we seem to hear lately is inflation, inflation, inflation.

With commodities skyrocketing, wealth is moving from consumers to ____________? Apart from the oil producers, I wonder who is really getting rich nowadays? What companies are are raking in bigger profits. I want to know so I can buy their stock! :)

Merlaco stays in the happy hands of the Lopez Family

2008-05-28T23:56:00.002+09:00

While I missed the details, I'm happy to hear that Meralco is staying in the happy hands of the Lopezes.

MER's closing share price today was Php60.00. Good bargain I think...

low volume, MER takes the spotlight

2008-05-27T00:12:00.003+09:00

Light trading
Trading was very light this 26th day of May. Only Php1.67 billion worth of shares were traded this first day of the week. The PSEi went down by 8.76 points. But nobody seems to care about that.

Spotlight on Meralco
The trading community seems more interested on how this whole Meralco thing pans out. Winston Garcia has been taking pot shots at the Lopez family and how they are managing Meralco. He blames them for the high cost of energy.

One word against the other
So far, I find the Lopezes to be a lot more credible that Winston Garcia. I find it hard to believe Mr. Garcia. Just earlier today on the news, he said that the Lopezes are trying to get him out of Meralco's board. That statement alone is hard to make sense of as he claims GSIS owns a 25% stake of Meralco. Based on the facts available to me, this is what makes we wonder: Even if the Lopezes gain the entire 75% vote, they cannot deprive the GSIS of at least one seat on the board because of the voting system under our Corporation Law. In fact, they can probably get more than one, but I'm too tired to compute exactly how many seats they are entitled to right now. Even if they cheat, which we have no evidence of, they can not deprive GSIS of a seat. If Mr. Garcia wants to stay in, he'll stay in. Hence, until these things are explained to me, I'm under the impression that he may very well just be making noise. I hope he clarifies things so we can form proper opinions about the issues he's raising.

snapping the losses and resuming the rally already?

2008-05-23T17:34:00.003+09:00

The market closed today (May 23, 2008) higher than yesterday's close by 10.70 points and settled at 2,849.28. I don't think this is very significant as the value turnover for the day didn't even scratch Php2 Billion.

My guess is that investor sentiment improved from yesterday as we saw U.S. markets snapping their losing streak. The composite indeces of the Dow, Nasdaq and S&P all managed to close in the green.

I have a feeling we'll track those indeces again tomorrow.

preparing to rally? -a bit of correction -33.87 points for the PSEi (May 22, 08)

2008-05-23T11:55:00.006+09:00

The calamities in China and Myanmar/Burma make my disappointments over our stock market seem so insignificant. The death toll in China has surpassed 55,000 according to CNN. So sad.

We've seen a second day of correction. The prevailing opinion from a perusal of our major dailies and websites are that we're tracking losses in Wall Street.

CNBC notes that "More rate cuts are still possible but unlikely"

Though the market dropped over thirty points, the value turnover was not enough to cause me much worry as it was only around Php2.14B. I'm still sticking to my gut feel that this market is getting ready to push up hard and fast.

another day in the green but with low trade volume

2008-05-21T00:54:00.003+09:00

Today's close (May 20, 2008) was in the green with the PSEi at 2896.15, +18.69 from yesterday. Value turnover was unexciting at Php2.4B.

Surprise for those expecting correction
While 18.69 points is not a large increase, it comes as a surprise to me. This week's outlook was for more correction. With inflation taking the limelight, that prediction seemed sound. On top of that, we just saw a rally of about eight days. What comes up, must come down.

Surprise, surprise... Yesterday's drop of only 2.49 points to 2,877.46 was also rather pleasant as it was quite negligible for the composite index at only -.1%

Less worrisome numbers
With the market making gains, even though rather weak for my taste, I'm getting more positive about where this market may be going. My gut feel is that it's getting ready to push up hard and fast.

ending in the green at +1.69 for the PSE

2008-05-16T13:52:00.004+09:00

A few surprises this week... PSE still up, Clinton stays in the race, BIR collects higher than expected taxes (+12.6% 1Q08), a "fusion man" flies over the alps.

The PHILIPPINES STOCK EXCHANGE INDEX managed to end the week with a record of eight successive days of gains. Trading volume today (Friday - May 16, 2008) was at Php3.38B. Even though the rally lasted eight days, it looked rather weak to me. If it won't continue through the next week or speed up, I will become even more bearish.

Earnings reports for 1Q08 income as against last year's were mixed. Here's a few:

MBT income down 16%
SECB up 10.3%
FPH down 79%
RLC up 19.8%
ABS down 13.6%

Oil and the fizzling the rally

2008-05-15T11:05:00.004+09:00

The PSEi has been rising for six and a half days. Good reports of first quarter income encourage buying as they indicate which companies can weather the Global slowdown and even go against the flow.

Oil however, is still hogging the spotlight and I suspect it is the main reason the almost seven day rally isn't too strong. PSEi was at +12.5 this May 15, 2008 at 10:17 a.m. The brighter side of it is that we're rising notwithstanding the steady rise of crude prices.

up, up and away?

2008-05-14T12:07:00.002+09:00

After five straight days of going up, we haven't gone very high. The PSEi closed at 2849.29 on May 14, 2008. Value turnover was at respectable level of around Php3B.

Those numbers are a far cry from 3900 and Php5B average daily turnover at some months last year.

The rally is weaker than I hoped and I fear will not last until the end of the week. I hope I'm wrong.

Crisis = Opportunity for the Philippine Economy (non-stock post)

2008-05-14T11:26:00.003+09:00

Food production is relatively easy for the Philippines. Why don't we feed the world's growing appetite for cereals? If we decouple food production from oil dependence and restore economies of scale to our farm estates, I think we have more than just a good chance.

One Two Punch
Receiving a one-two punch, our rising economy that boasted robust growth last year, is saddled with rising oil and food prices and everyone is wondering how to cope.

Higher Food Prices Can Be Good
I would like to suggest we consider the proposition that rising food prices presents an opportunity for the Philippines to assert one of its greatest potential competitive advantages. On the assumption, which I think is fair, that it is relatively easy to produce food in our country, we are faced with a huge economic opportunity.

The first key: Reducing Oil dependence for food production
I think the key to harnessing this advantage would be to find ways to produce the food with little or no need for petroleum products. If oil is not a cost or is minimal, we have a big advantage as against other producers as we will be able to sell at competitive prices with larger margins. After all, one of the main drivers of the food price is the oil price. Its effect is two fold. It affects the price as it is one of the costs of production. It also affects the price by encouraging the diversion of food supplies to transform them into biofuels as food is now a substitute for fuel.

Exploring Alternative Energy
As far as farms are concerned, nature makes available alternative energy sources with direct application like the sun, the wind and moving water.

Windmills for instance have long been used to create sufficient energy for industrially viable processes. That energy can be used for irrigation of inland fisheries or crop plantations, processing of sugar and, I imagine, there are much more.

Recognizing Our Distinct Advantage
While many countries can only dream of our rich natural resources, like fresh water and particularly fertile soil, we are busy turning them into subdivisions and golf courses.

The Next Key: Restoring Economies of Scale
It takes only common sense to understand the importance of economies of scale in any industry. I propose that we return the ability to achieve economies of scale for our farm estates by again permitting the ownership of large estates instead of always chopping them up in pursuit of the romantic idea behind the Comprehensive Agrarian Reform Law. Globalization arrived after the CARL, its time for some change, we need to adapt.

A Better Future
I would much rather our country be known for food production than for domestic helpers, or a good source of people to answer phones. While I am grateful for these job opportunities that support millions of Filipinos, and which in turn float our economy, I have bigger hopes for our sons and daughters.

upbeat market sentiment

2008-05-12T11:44:00.003+09:00

A perusal of the Manila Bulletin today (May 12, 2008) reveals that there is an upbeat market sentiment for this week. Maybe the giant San Miguel Beer bottle on Ayala avenue right in front of the PSE has something to do with it.

After watching the market make a few huge steps down since April, it's nice to hear some bullish sentiments.

Tsupitero thinks any rally below the 3050 level is nothing more than a dead-cat bounce. I can't define what a dead cat bounce is but the name implies enough. We don't want that. Anyhow, I'm still betting on Philippine Stocks for '08 as a whole. Time will tell.

unimpressive upward movement

2008-05-09T14:18:00.002+09:00

The PSEi rose again today (May 9, 2007) by only 18.80 points with total trade value of about Php3.5B. I find this unimpressive and disappointing. Without a strong rally, I fear that this market will spook investors even more.

MER stock price headed to the dog house

2008-05-07T18:11:00.005+09:00

Notwithstanding the increase in 2008 1Q profits of MER, their price dipped from the Php80 level to Php69 in a couple of days.

Meralco is under attack by the GSIS. The folks over at the Government Security Insurance System say Meralco has been charging customers to compensate for their own inefficiency. It appears that they think they can undue what has been done or prevent any further similar action by legal process.

Not good for the stock price. This is true specially since Meralco has been under pressure from the administration to lower their rates.

However, if the GSIS can really do all that is another matter. I place my bet on MER and find this to be an opportune time to buy into this company at a bargain.

where are the bulls?

2008-05-07T18:03:00.002+09:00

The market may be bad, but I slept like a baby last night. I woke up every hour and cried.

The PSEi went up on May 7, 2008 by 11.73 points. Value turnover was at a respectable level of Php4B. Looks good, but not good enough, I think.

The fresh wind of hope from the U.S. economy didn't make it here until today as shown by the Philippine Stock Exchange Index. The rice shortage or at least the perception of a shortage along with inflation going through the roof are factors that weigh down on local investor sentiment. Corporate earnings are largely within expectation but maybe market is already priced into better corporate performance since it had little effect on our stock prices.

hitting the panic button

2008-05-06T15:57:00.003+09:00

The numbers aren't looking good. Prices went down again today at a convincing volume of over Php4B.I think the numbers are forming a pattern that may induce more dumping of Philippine Stocks.

Projections for our index last year were being thrown in as high as the 10k level and more conservatively at the 4k level within 2007. We're a far cry for there and it looks like the market wants to move even further.

I remember the saying "buy cheap, sell high." I wonder if this is such a time that stocks are "cheap"? When that panic button is hit, who will stand to benefit more? Those who run for shelter or those who stay and keep hunting for bargains?

why didn't we follow wall street?

2008-05-05T16:38:00.004+09:00

The consensus seemed to be that Wall Street was dragging the world down by spreading fear, the Philippines included. But with Wall Street climbing up, what we expected for the Philippine Stock Exchange Index did not happen.

The PSEi didn't rally. Are the prospects for the Philippine Economy really low? While the trend of the market seems to be going down, are our fundamentals really weak? Or are the bargains just getting better?

hurray for some green lights :)

2008-04-25T00:43:00.002+09:00

Although total trades were valued at only around Php2.5B, I'm glad to see the overall performance of the PSEi to be in the green. (PSEi +19.21 on April 24, 2008 @ 2,844.02)

The question on everybody's minds must be: Is the market bottoming out?

Technical Analysis probably won't give a definite answer at this point in time. However, my gut feel says the bottoming out is starting. Why? Well, first, the main mover of global markets is still the U.S. stock market. Second, there seems to be a growing concensus that the worst is over for U.S. lending giants. Third, one of the greatest drivers of investor anxiety were the large losses of American Banks. If its over, there will be sighs of relief all around.

While that isn't really air tight logic, neither is the logic of most investors. Given that, most market movement is based on similar thinking. Now, to see if I can scrounge around for more cash and bet on this bottom. :)

little happiness over Philippine Stocks

2008-04-23T23:22:00.002+09:00

Unexciting year
2008 has proved to be rather unexciting. Everyone is gloomy. Business is slowing down, oil is getting more expensive, and the dollar is falling. A more curious addition to the sad news is that food prices are going up.

Little upward movement
What I find very sad about our market's performance for 2008 is that even when all the good news of growing profits came in, our stocks tracked global markets and didn't really move up.

Foreign Influence
Domestic demand seems to be stable but since foreign buying accounts for about half of the activity in our stock market, there is still an umbilical cord to foreign markets. Generally, the world has been reacting to wall street and wall street's lead has been downard.

Unconventional Wisdom
Still, I remember my favorite quote from Warren Bufett: "Be greedy when everyone is fearful and be fearful when everyone is greedy". Follwoing that I'd still avoid investing in Philippine Real Estate and keep adding positions in Philippine stocks. If I could, I would even purchase U.S. Real Estate at foreclosure sales. :)

imported bear meat

2008-04-10T13:03:00.002+09:00

When the U.S. stock market slides, our will slide. Same old same old. -20 yesterday, around the same today. Not quite what I expected for the week. I thought those bulls were right around the corner. Maybe they're just gathering momentum.

On the bright side, Tsupitero says it doesn't look so glum right now. The numbers never lie and they are no longer pointing downwards. Are they looking up? Maybe. We don't know for sure. I guess its time to place new bets.

If I'm to listen to my gut feel, I say we'll see the index hit 2700 before we have any serious bull runs that will breach last year's highs.

Paxys keeps fighting

2008-04-09T14:29:00.003+09:00

PAX is one stock that many would like to forget. It figured in many portfolios during 2007 but performed miserably towards the end of the year. These days, it is languishing at around the price of Php3.00/sh. Twelve months ago it looked ready to hit ten times that price.

Aside from the one-two punch of the falling dollar and the slowing U.S. economy that hit the BPO industry as a whole, PAXYS faced problems of its own. The long and the short is that its revenues failed to hit targets miserably and there was little or nothing to give investors a reason to hang on to its stock.

Just recently though, they announced the formation of a joint venture, implying better business to come. The details are a bit sketchy for me, I have yet to review it to figure out what I think of it. For the meantime, Citisec thinks its positive and is busy changing their Target Price for PAX - presumably for the better.

sideways today

2008-04-08T16:13:00.002+09:00

After the three day weekend, April 3 was a day of sideways movement. The PSEi closed at 2,981.12, which was down by only 1.92 points from the last trading day.

While we saw the bears flexing their muscles late last week, they seemed to be tentative today. At some point I saw the market down by over fifty points but then the next moment it would be up again.

I expected the market to keep heading down towards 2700 or 2500, at which point I was preparing to take a few more positions. However, it seems that the bears are looking like they want to take a summer break. I'm starting to get more excited.

the bears awake

2008-04-04T17:48:00.003+09:00

The bears woke up after a short slumber. The Psei closed April 4 at 2983.94, 51.77 points lower than the previous day's close. All but one (BDO) of the top traded stock for the day went down. BDO remained unchanged at Php53.50.

The Philippine Stock Exchange seems to have been under the bears control for too long, but the activity during the early part of the week tells me that its possible that we'll be hearing more than just a strong dissent from the bulls.

taking a breather from the gains

2008-04-04T02:09:00.003+09:00

The Philippine Stock Exchange Index had been on the rise, finally breaking that 3000 level after languishing below it too long for comfort.

The PSEi closed April 3 slightly above the 3000 level.

BDO, MER and MWC took most of my attention.

MER
Although MER fell from its glorious high of 114 within the past 52 weeks, it seems to be doing much better than its counterparts. I've always wondered if hot summer months make life better for a utility company like meralco. MER closed April 3 at Php81.50.

MWC
I only decided to check this company out after my girlfriend told me to buy it based on a random thought. I did some research and found it suited my preferences for stocks. The long and short was that I bought it at the 14 level and sold happily at around 17.75. MWC closed April 3 at Php18.25

BDO
We often refer to this as "Henry Sy's Bank" or "SM bank." I know someone who won't buy this stock solely because she doesn't personally like the ol' man Henry. I like it because I think they do their business well. Whether I agree with them, like them, or totally abhor the personalities behind that bank, I have to admit they are good and its obvious that they are good. BDO closed April 3 at Php53.50

PX at sixish...

2008-03-31T19:44:00.004+09:00

Around November last year, I was kicking myself for not buying this stock. It was hovering around the fivish level for so long, I thought it was stuck there for good. Hehe. Yet, by November last year it was punching the 11 level and looking like it was ready to hit 12.

Everyone is a genius in hindsight. Ideally, I should have bought some at the fivish level, sold it when it reached around ten, then by now I would happily be considering buying some back at its current levels.

But no, we bought some geo at a price range with a low of 1.5 and a high of 2.4. When it peaked at 2.7, I failed to see it sputter. Now its down to 1.2 and I'm having a big exercise in patience.

rice shortage in the philippines - it sounds like a joke!

2008-03-31T19:28:00.002+09:00

The newspapers reported of a rice shortage. I thought it was a joke. Soon after, I heard it on TV too. I guess they weren't kidding. It was a serious issue. It just sounds so crazy that a country like the Philippines would be worrying about a rice shortage.

From what I've read, the government denies that we shouldn't be affected by the Global crisis. I really have to agree with that. Yet, a tiny part of me wouldn't put it past shady businessmen to begin hoarding and create that shortage locally and make a pretty penny while at it. I hope they catch those suckers!

little worries about the philippine economy

2008-03-31T19:08:00.003+09:00

With all the talk about a Global slowdown, economists largely agree that the Philippines will be better off than the neighboring countries.

I wonder why there's so little worry about the Philippine economy. Here some things that keep me from worrying too much about our economy:

1. Our Exports are no longer beholden to the U.S. economy. We have buyers in many other parts of the world.

2. Large foreign denominated income keeps growing. OCWs and BPOs are the champions here. Note that they do not earn only in dollars. OCWs are all over the world and a good number of them receive Euros and australian dollars. The same is true for BPO. We import jobs from all over the world.

3. The BSP is doing a fine job. While the BSP reported losses, we must remember that the BSP is not there to earn lots of income. It serves the primary purpose of keeping the peso stable. Prior BSP officials can only agree that the incumbents have done a good job.

4. The world's appetite for minerals and agricultural products are rising. Whether we want it or not, the Philippine's has major strategic advantages in these areas.

5. The world is sick of being oil dependent and solutions are coming soon. The most obvious is the rising sales of small cars. While the nano of tata probably won't be sold here anytime soon. China and korea have shared the blessing of the picanto for kia, the getz from hyundai and the qq from chery. Tiny engines help Pinoys deal with rising oil prices. Chery's qq has a surprisingly small engine. Its displacement is at a jaw dropping and almost funny level of .8 liters.

copy cat bandwagon

2008-03-27T18:40:00.002+09:00

The Philippine Stock Exchange took a few nose dives over the past months and spooked many people. I blame it all the doomsdayer's talk about the U.S. economy. Now that all that grim news has been squeezed out, people are welcoming the opinion that the worst is over. Is it? well I haven't really had the chance to find out for myself.

As far as the Philippines is concerned I think that we will follow the U.S. up if they do go up because I subscribe to the assumption that they're the only reason why we went down in the first place. Things here are going way to well for our market to keep plummeting.

A very reputable columnist, Ron Nathan of the inquirer doesn't seem to have made up his mind about it either but had this to say last sunday:

"Well, it's back to work tomorrow. BERNANKE has done everything expected of him. He cut the interbank rate, released $200 billion into the system, cut 75 basis points and gave JP Morgan $30 billion to bail out BEAR BULL. We can only sit back and hope that the price of oil comes down to $80 a barrel so that inflation will not become a serious problem. Some analysts think the worst is over so Wall Street has been rising and most other stock exchanges have played follow the leader. Foreign brokers have slashed their one-year price targets dramatically so my last list is hopelessly out of date."

playing it safe

2008-03-27T18:19:00.003+09:00

I was once told that any person entering stocks should be ready to leave their money alone for at least ten years.

I understood that to mean that they would not really have to, but if they wanted to see real gains without too much risk exposure, time will be one of the main investments.

Being relatively new to trading stocks, I make it a point to play it safe by following on simple rule above all else.

1. Buy only stock from companies that are likely to grow over the long term.

However, if that's all i do, it's an extremely boring thing to do. I wanted to have fun while doing this so in addition, I tried this strategy without breaking the first rule:

2. Buy stocks that I think will rise significantly in the short term and sell quickly after they reach my target.

This made it more fun. Nice and challenging. Short term trading with a safety net. Its an inherently limited strategy but it keeps things safe for a newbie like me.

little time to check on stocks

2008-03-27T18:10:00.003+09:00

I don't like it when I have little time to check up on the stock market. I have been having my final exams at my Law School over the past weeks. My time is monopolized as if by a jealous mistress.

While I have made a hobby out of trading stocks, I think that following the movements of the stock market on a daily basis, is one of the keys to successfully investing in the stock market.

It is a fickle entity, yet patterns emerge over time. If we are to learn the patterns, we have to be around to see them as they unfold.

i smell blood

2008-03-19T14:28:00.001+09:00

There will be blood on the market if the short-term trend continues. I'm not much of a technical analyst but that much is easy to figure out.

Following the latest data on corporate performance, I'd say were going to see largely oversold stocks.

The old saying goes "buy when there's blood on the market." As we don't often see moments where its that bad, I think those of us who are liquid should count ourselves fortunate to have a good buying opportunity coming right around the corner.

For those hanging on to portfolio's in the redline, it will be agonizing. I think the key would be to keep emotions out of the decision making.

WSJ: Most Economists Say Recession Has Arrived as Outlook Darkens

2008-03-16T00:42:00.002+09:00

Phil Izzo lat Thursday, March 13, 2008 talks about evidence of a recession.

"The U.S. has finally slid into recession, according to the majority of economists in the latest Wall Street Journal economic-forecasting survey, a view that was reinforced by new data showing a sharp drop in retail sales last month." full text

A recession is traditionally defined as two consecutive quarters of negative GDP growth. I don't think this has happened yet. If I may venture a guess, I doubt that it will. That is at least as far as this year is concerned.The FED is too aggressive. Maybe next year the U.S. will see the recession, as defined.

a dose of the best medicine

2008-03-16T00:34:00.000+09:00

"A long time ago, a visitor from out of town came to a tour in Manhattan. At the end of the tour they took him to the financial district. When they arrived to Battery Park the guide showed him some nice yachts anchoring there, and said, "Here are the yachts of our bankers and stockbrokers." "And where are the yachts of the investors?" asked the naive visitor." jokes.net

grapevine: New trading floor at the Fort; dodgy mining company

2008-03-16T00:20:00.006+09:00

Heard only in the unofficial form:

Trading Floor
My grapevine tells of the construction of a new home for the Philippine Stock Exchange. What I've heard is that there will only be one floor to replace the two physically separate venues currently in Ortigas and Makati. The new venue will be at the Fort.

Mining Company
Also, there's been some talk of a new Mining company in the Philippines that is soliciting investments. I'm told that it seems dodgy and questionable. I don't even know what the name is. tsk tsk tsk.

Stock Dividends from BPI
I'm kicking myself for buying a few BPI shares at 63 last December. A few days ago, I was told that, as a consolation for me there's some good news to offset the loss. BPI is to dish out some stock dividends this April. Twenty percent (20%) they say. I sure hope its 20! Last I checked, BPI went on a long slide and was down to 51!

calling out the bulls

2008-03-15T23:58:00.003+09:00

Tsupitero, a technical analyst, said last March 10 that he'll only be bullish when we see the PSEi break 3333 at high volume. Sounds like a dream.

It's bear market. Technically, a bear market is a drop of 20% from the most recent high. The PSEi went up to around 3900 recently and is now moving around the 2900 level. That's over 25%. However, I think this is a good buying opportunity. Off the top of my head, here are a few reasons why:

1) Good fundamentals (i.e. strong private sector, tons of dollar reserves, lots of dollar earning economic activity, stronger peso, the list goes on!)
2) Political uncertainty is on the wane
3) The U.S. stock market isn't so bad as only the Nasdaq entered what is technically called a bear market.(CNBC) I mention U.S. stocks because for some reason, our market likes to follow theirs.
4) The U.S. FED is working hard at preventing a recession or at the very least, keeping its ill effects at a minimum. Investors the world over are worried that the U.S. will spark a global slowdown. I think that it's likely that it will but no one is forecasting a global recession. We'll still generally be seeing positive figures.
5) Investor are fearful over stocks causing many to become oversold! The trick is finding which ones these are.

I have many other reasons but I think my brain is much slower on Saturdays. I'll follow up on this. My gut feel, I can't fully say why, is that we'll see a strong bull run if we hit 2750. I'm going to put my money where my mouth is. If there's any more to put... hehe..

annoying numbers when liquidity is low

2008-03-14T14:50:00.003+09:00

I don't like looking at the market's numbers. I saw GEO at 1.14, Meg at 2.18, BPI at 51, BDO at 47 and MER at 80. I don't like them not because they are low but because they are low and I'm not as liquid as I want to be.

I'm still willing to bet on the Philippine economy and I think we're beginning to see some really excellent entry points for very good stocks.

weary portfolios and a bleak outlook

2008-03-14T14:32:00.003+09:00

If the market's trend is about to turn, there is no apparent sign of it. Philippine Stocks have been on a downward path since around November of last year. That was the time the harsh effects of the mortgage crisis were being seen in concrete figures.

Political Uncertainty & the Falling Dollar
Even after a banner year for our economy in 2007, our good fundamentals could not withstand the global financial market's jitters and caved in under the pressure. Early in the year, Philippine companies were reporting left and right about how much their profits increased. This news was eclipsed by Political uncertainty and the falling U.S. dollar. Politics brougth the infamous ZTE-NBN to light then the questionable north rail project, now the spratlys.

Higher Oil Prices
One of the greatest overall benefits of the falling dollar was that the relatively higher peso shielded us from feeling the effects of rising oil prices. Even that benefit however is being eroded as oil producing countries increase the pace of price increases to keep their economic position strong. Many of those countries peg their currency to the dollar and have hoardes of dollar reserves.

Ron Nathan believes that the U.S treasury is printing U.S. dollars like its monopoly money. As a child, I wondered often why countries didn't do that. Now we'll find out.

did Arroyo sell out the spratlys? -i don't think so.

2008-03-14T14:05:00.002+09:00

Let's call a spade a spade. The opposition is using words like "blunder", "sell-out", and even "treason" citing the 2005 tripartite agreement for seismic undertaking over the spratly islands with the Philipipnes, Vietnam and China. I think they are being too harsh this time.

While I'm not a big fan of the administration, I don't think its as bad as they say for the following reasons:

1) Joint agreements for exploration are not inherently bad. From an economic standpoint, they are good. Other countries have done it and have reaped handsome rewards. In our case, China is willing to "shelve" their claims on the spratlys and cooperate on how to exploit the resources and agree on the sharing later on.

2) Without considering legal issues and for the sake of argument, it is arguably a good policy to cooperate with China. Some say the sleeping giant has awoken. I don't think it has yet, and I think China's policies say so as well. At the moment, they are busy trying to gain a favorable image in the world and cooperation with countries like the Philippines help them get this better image. Lets work with them before they start throwing their weight around and while we still can.

3) A President cannot cede land. In the Philippnies, there is no doubt. The consitution is clear. China knows this, they won't try anything as absurd as asking our President to cede our land.

At a forum in U.P. diliman:

Dean Pangalangan of the U.P. College of law propounded the following objections with regard to the controverisal tripartite agreement:

1) Lack of transparency
2) Unconsitutionality (as it involves exploitation on natural resources)

Dean Baviera noted that it was obvious that diplomatic negotiations took place and the administration should be clear on what compromise the country entered into, what we got in return and where it went.

Finally, since this project has potential in helping our economy and Filipinos in general, I think we, as citizens should just dare our President to finish the job, get our share of the oil and show us the money! :)

The next U.S. president and Business Process Outsourcing and why we should care

2008-03-07T23:43:00.003+09:00

American jobs have been pouring into the Philippines via Call Centers. With the election coming up, Filipinos should wonder if the next American President will allow this to continue. After all, its not just call center jobs that we have received.

BPO is an important issue for anyone investing in the Philippines. Its growth will carry some industries with it but if it weakens, it can pull others down as well.

Democrat position
Obama and Clinton claim to be opposed to outsourcing of American jobs. They both advocate the removal of tax cuts favoring companies that ship their jobs overseas.

Republican Position
Mccain's position on the matter is not as clear. Blogoshere opinion places him supporting outsourcing.

Importance of Business Process Outsourcing (BPO)
BPO, best known by the call center industry brought many new jobs and strengthened supporting industries. The real estate industry is one to have benefited. Call Center Companies are providing demand for office space and the employees are providing demand for residential space. Megaworld (MEG) for instance, is riding the wave and is reaping happy rewards by providing much needed office space to the BPO industry players. Beyond real estate, the list will go on and include even transportation and information and communications technology.

Peso and Dollar spending power
BPO places dollar revenues in the hands of the Philippine companies and more peso income in the hands of the employees. Relatively, the salaries of BPO workers are high. This is a significant contribution to the flourishing domestic demand.

Beyond Call Centers
BPO includes outsourcing of Human Resource Functions. An example of this would be IBM. A few years back, IBM took over P&G's human resource department and began outsourcing the hr work of P&G and other firms.
Accounting is also another popularly outsourced function. Companies like citibank perform accounting and related activities for foreign clients.

BPO in its Infancy
There is so much more ground to cover in this industry and tremendous growth potential. Legal and Medical transcription is another area where the Philippines can become a major player. However, we still need privacy laws to be in place before we can gain a major share of the U.S. and E.U. market.

infamy: the worlds largest trade losses and the losers

2008-03-06T23:00:00.002+09:00

While the world loves to watch how great traders continue to amass fortunes, let's take a look at those found their place in infamy by losing fortunes in trading.

The latest to join the list of infamy is a frenchman named Jerome Kerviel. He has been charged in the January 2008 Société Générale trading loss incident, resulting in losses valued at approximately €4.9 billion. ($7.5B)

Others:
1. Nick Leeson: Barings PLC, Britain's oldest investment banking firm, collapsed after one of its Singapore-based securities traders (Nick Leeson) lost more than $1.4 billion by gambling on Tokyo stock prices; http://www.kipnotes.com/Scandal.htm

2. Yasuo Hamanaka : a Japanese national caused a loss of about $2.6 billion, over ten years, in unauthorized copper trading on the London Metal Exchange (wikipedia)

3. John Meriwether an american, lost $4.6 billion trading interest rate and equity derivatives in 1998. He was working for Long Term Capital Management. (wikipedia)

4. Brian Hunter : A canadian, lost $6.5 billion trading gas futures working for Amaranth Advisors in 2006 (wikipedia)

the world's richest man

2008-03-06T22:46:00.002+09:00

Forbes has put Warren Buffett on top of their list at $62 Billion unseating Bill Gates after he held it for 13 years. He's on a roll having jumped $10 billion a year for the past two years. I think its very cool that he gives lots of money to charities.

Here's the Forbes top five:

1. Warren Buffett - $62 billion
2. Carlos Slim - $60 billion
3. Bill Gates - $58 billion
4. Lakshmi Mittal - $45 billion
5. Makesh Ambani - $43 billion

most dangerous month for stocks

2008-03-05T00:07:00.004+09:00

What is the most dangerous month to invest in stocks?

"October. This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August and February."
-Mark Twain

how long will the world let the dollar slide?

2008-03-04T23:46:00.005+09:00

Falling dollar and advantage/disadvantage
Many countries like the Philippines arguably enjoy more advantages than disadvantages from the falling dollar, however that's not the case for everyone. It may not be long before there is a concerted effort to push the dollar up or at least pressure the U.S. to take some serious steps to shore up its dollar's value. After all, many states have not only invested heavily in U.S. T-bills but use the popular greenback as the currency for their reserves.

Oil pressure on economy
If that does happen, the Philippines and others may have to watch out. For the Philippines, one of the largest benefits is that the increase of the peso vs the dollar cushions the blow of the rising world oil prices. As it is the cost of the oil is weighing heavily on the economy and keeping our GDP growth from reaching higher levels. If the dollar rises again, there will be more pressure exerted by oil prices on our economy.

A weak dollar is preferred
My gut feel is that the U.S. shouldn't want a strong dollar at this point in time. U.S. industries need to look abroad for new markets since domestic demand is falling. A relatively weaker dollar will help boost sales to foreign markets. Its a strategy that China has benefited from tremendously. Although the U.S. has long been condemning it, they may find themselves gaining much from a similar strategy.

The question remains then, how long will the world let the dollar keep sliding?

signs of hope

2008-03-04T23:28:00.002+09:00

The market's movement last week shows us signs of hope. 2700 was a level that some TAs pointed to as a possibility. While that may still be true at this point, it also seems that there is a possibility that we'll see the bulls take charge for a change.

Tsupitero's says the level to watch is 3333. High value turnover breaking above this level will point to a rally that will likely push to the higher end of the market's current consolidation between 2900-3900.

We may finally be able to find good short term trades with a lot less trouble.