There are signs that local Philippine consumer spending may be going down.
Less Traffic
I'm sure I'm not the only one who noticed that traffic in our Metro's streets has been behaving nicely. Unfortunately, people traffic in our shopping malls have been reportedly low also.
Lower spending in malls
I heard that credit card usage was not rising sharply alongside metro manila mall sale periods. A rise in credit card usage is normal during periods wherein malls have big sales. People have been spending less money lately, at least as far as malls are concerned.
Fearful metropolis
Could this be the beginning of a trend where people start tightening their belts? Or are we just seeing a blip caused by the local political chaos? Not too long ago, an explosion in Glorietta was largely believed to be a tactic of the administration to divert the public's attention from attacks against it. Whether this be true or not, people are fearful that it may happen again. Whether the fear is misplaced or not, the fear itself is real.
Lower dollar
Another possible reason for lower spending is the falling dollar. I've personally heard of dollar earning people cutting down on expenses simply because they don't have as much anymore, and it looks to them like things may either stay that way or even get worse.
Effect on the market
Strong domestic consumption has been one of the Philippine's greatest strengths. If this weakens, it will negatively affect our overall economy. News like this will definitely dampen investor sentiment specially since everyone is already factoring in shrinking exports. Hopefully, the fall in consumer mall spending is temporary and will not affect domestic consumption as a whole.
Showing posts with label philippine stock market. Show all posts
Showing posts with label philippine stock market. Show all posts
Wednesday, February 20, 2008
Thursday, February 14, 2008
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.
Thursday, February 7, 2008
why we should love corrections (seryosong usapan muna)
Generally unpleasant
Corrections are associated with unpleasant things. I remember when I first tried buying stocks. I did it with two unexperienced friends. We made our debut into Philippine stocks last year when the market was reaching new highs around the 3800 level. Shortly after, we saw a major correction in the Philippine Stock Market and watched the value of our new stocks plummet. We didn't like it. Luckily, we were patient, and since it was just a correction, the values returned to our entry levels and after a lot of waiting, rose a bit to give us our first taste of gains.
It can be a good thing
After almost a year of watching the stock market, talking to people about it and reading related material and news, I have a different view of corrections. I think it can be a good thing for various reasons, here are a few that I want to highlight:
1) It makes everyone cautious
2) It makes investors more discriminating
3) It reveals which stocks are quality stocks
4) It shakes off the careless and ill informed investors
5) It exposes the real value of stocks
6) It opens up buying opportunities
Caution
When markets rise day in and day out, investors can get careless. When prices drop, all that carelessness goes out the window. We then have an opportunity for everyone to pause and ask the important questions like why did prices drop? Will they keep going down?
Discriminating investors emerge
With investors asking important questions about the businesses that they own equity in, information begins to proliferate. Analysts keep working and churning out information useful in decision making. Investors in turn, swallow up the information ravenously. The result is a well informed investor community that becomes more discriminating in their choices.
Quality Stocks
Even when markets turn sour, there are still some stocks that go against the flow. When markets correct, we'll see which ones these are. Then we can study them and possibly end up adding good quality stocks to our portfolio.
Careless investors run away
When losses occur in the market, the immature investors who don't know what's happening and don't care to find out usually run for shelter. Often it is to everyone's benefit that they do. A careless investor community is not good- for themselves or the people in general. The chinese government is fearful because their citizenry is begging, borrowing and stealing, so to speak just, to invest in stocks. It may be because their bubble has been growing so fast and steadily that people have forgotten that money can be lost if they are not careful. Maybe a good correction is in order there. In the Philippines many uniformed consumers bought into equities via U.I.T.F.s and lost big time because they didn't understand how it worked. They'll know to stay away next time or return well informed.
Real value of stocks
As early as feb last year, we saw world markets being rocked by news of a brewing sub-prime mortgage credit crunch in the United States. For those, like me, who were unaware of its magnitude, that correction made me rather aware of it whether I wanted to be or not. Many investors were so bullish at that time that they believed we'd see the Philippines Stock Market's Index (a.k.a. Phisix/Psei)hit 5000 points in 2007. Yet, with a slowdown or a recession in the U.S. looming in the horizon, business projections the world over had to be adjusted. A well informed person will see all this before the correction, but the correction will let everyone in on it. Then the value of the stocks will return to levels closer to what they really are at.
Buying opportunities
When markets become oversold, bargains appear. Stocks become relatively cheap and people with ready capital get to pick and choose.
Corrections are associated with unpleasant things. I remember when I first tried buying stocks. I did it with two unexperienced friends. We made our debut into Philippine stocks last year when the market was reaching new highs around the 3800 level. Shortly after, we saw a major correction in the Philippine Stock Market and watched the value of our new stocks plummet. We didn't like it. Luckily, we were patient, and since it was just a correction, the values returned to our entry levels and after a lot of waiting, rose a bit to give us our first taste of gains.
It can be a good thing
After almost a year of watching the stock market, talking to people about it and reading related material and news, I have a different view of corrections. I think it can be a good thing for various reasons, here are a few that I want to highlight:
1) It makes everyone cautious
2) It makes investors more discriminating
3) It reveals which stocks are quality stocks
4) It shakes off the careless and ill informed investors
5) It exposes the real value of stocks
6) It opens up buying opportunities
Caution
When markets rise day in and day out, investors can get careless. When prices drop, all that carelessness goes out the window. We then have an opportunity for everyone to pause and ask the important questions like why did prices drop? Will they keep going down?
Discriminating investors emerge
With investors asking important questions about the businesses that they own equity in, information begins to proliferate. Analysts keep working and churning out information useful in decision making. Investors in turn, swallow up the information ravenously. The result is a well informed investor community that becomes more discriminating in their choices.
Quality Stocks
Even when markets turn sour, there are still some stocks that go against the flow. When markets correct, we'll see which ones these are. Then we can study them and possibly end up adding good quality stocks to our portfolio.
Careless investors run away
When losses occur in the market, the immature investors who don't know what's happening and don't care to find out usually run for shelter. Often it is to everyone's benefit that they do. A careless investor community is not good- for themselves or the people in general. The chinese government is fearful because their citizenry is begging, borrowing and stealing, so to speak just, to invest in stocks. It may be because their bubble has been growing so fast and steadily that people have forgotten that money can be lost if they are not careful. Maybe a good correction is in order there. In the Philippines many uniformed consumers bought into equities via U.I.T.F.s and lost big time because they didn't understand how it worked. They'll know to stay away next time or return well informed.
Real value of stocks
As early as feb last year, we saw world markets being rocked by news of a brewing sub-prime mortgage credit crunch in the United States. For those, like me, who were unaware of its magnitude, that correction made me rather aware of it whether I wanted to be or not. Many investors were so bullish at that time that they believed we'd see the Philippines Stock Market's Index (a.k.a. Phisix/Psei)hit 5000 points in 2007. Yet, with a slowdown or a recession in the U.S. looming in the horizon, business projections the world over had to be adjusted. A well informed person will see all this before the correction, but the correction will let everyone in on it. Then the value of the stocks will return to levels closer to what they really are at.
Buying opportunities
When markets become oversold, bargains appear. Stocks become relatively cheap and people with ready capital get to pick and choose.
sticky tikoy; sticky stocks
Today is the day the chinese celebrate the new year with such wonderous things as tikoy. Made from sticky rice, I like it best cooked with egg. Kung Hei Fat Choi!
The market barely moved today. With a volume of about Php1.2 billion pesos, the index went down by only 5.64 points sticking close to this lame level that I am beginning to dislike very much. *yawn. It's one of the more boring days for Philippines Stocks.
The market barely moved today. With a volume of about Php1.2 billion pesos, the index went down by only 5.64 points sticking close to this lame level that I am beginning to dislike very much. *yawn. It's one of the more boring days for Philippines Stocks.
Thursday, January 31, 2008
will the 3 day rally continue to 4? -not likely
I looked at how the market did today and I noticed that the PSEi inched up nine points. Looking at the chart of the day, I saw a flat line. It looked like a very lifeless trading day. Surprisingly though, the value of the trades was very near the Five Billion Peso mark.
Last week, we saw a three day rally that was stronger than what we saw through the beginning of this week. I'm guessing that the Psei is sputtering at this point and will tumble towards the end of the week closer to the support at around 2900. I hope I'm wrong about this but my gut feel is that this tiny rally is over.
Todays (January 31, 2008) overall stats at the Philippine Stock Exchange:
Index----------------------Previous-----Current----Change
PSE Composite----------3,256.53-----3,266.00---9.47
All Shares----------------1,977.98-----1,973.96---(4.02)
Financials----------------776.71-------743.77-----(32.94)
Industrial----------------3,928.57-----3,970.94---42.37
Holding Firms-----------1,724.94-----1,713.39---(11.55)
Property------------------1,314.36-----1,314.29---(0.07)
Service--------------------1,732.01-----1,778.20---46.19
Mining and Oil----------7,202.36-----7,092.56---(109.80)
Total Trades 7,853
Total Value 4,890,036,000.00
Total Volume 913,251,714
Up Volume 163,295,240
Down Volume 559,370,850
Unch Volume 190,387,760
Advances 27
Declines 82
Unchanged 51
(citiseconline.com.ph)
Last week, we saw a three day rally that was stronger than what we saw through the beginning of this week. I'm guessing that the Psei is sputtering at this point and will tumble towards the end of the week closer to the support at around 2900. I hope I'm wrong about this but my gut feel is that this tiny rally is over.
Todays (January 31, 2008) overall stats at the Philippine Stock Exchange:
Index----------------------Previous-----Current----Change
PSE Composite----------3,256.53-----3,266.00---9.47
All Shares----------------1,977.98-----1,973.96---(4.02)
Financials----------------776.71-------743.77-----(32.94)
Industrial----------------3,928.57-----3,970.94---42.37
Holding Firms-----------1,724.94-----1,713.39---(11.55)
Property------------------1,314.36-----1,314.29---(0.07)
Service--------------------1,732.01-----1,778.20---46.19
Mining and Oil----------7,202.36-----7,092.56---(109.80)
Total Trades 7,853
Total Value 4,890,036,000.00
Total Volume 913,251,714
Up Volume 163,295,240
Down Volume 559,370,850
Unch Volume 190,387,760
Advances 27
Declines 82
Unchanged 51
(citiseconline.com.ph)
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