Philippine stocks surge to 2-year high



Philippine stocks continued their recent rally this week, with the Philippine Stock Exchange index reaching 3,166.60 yesterday (March 24) to reach its highest level since late February 2008. Turnover was heavy at 3.8 billion pesos supported by heavy foreign buying.

The two-year high comes amidst upbeat global investor sentiment and a string of favorable local reports... and despite the ongoing confusion leading up to the May elections.

I personally believe the index still has some way to go upwards as many main-line stocks are still relative bargains - although there will be occasional corrections. In particular, look out for property-based stocks.

I'm not sure about your confidence Jurg. I've got nagging doubts that the Philippine market is just tailgating the international markets and we don't have real upward momentum by ourselves, no solid foundation. The PSE index could slide just as easily as it has climbed.

There's no way of telling yet, not til after the Holy Week break. Most of the punters are already out of the market (maybe spending their profits from the last few weeks?).

I see that today local share prices barely moved. I think the index eased 0.1 percent. Fewer than a billion stocks changed hands, worth 3.21 billion pesos. And despite the slight index loss, there were more gainers than losers 58 to 38, with 67 stocks unchanged. In other words, holiday stagnation.

I'll be interested to see what happens next week when everyone starts counting their money again. I hope you're right in your optimism but I am really not with you.

For the record ... the Philippine Stock Exchange index went up again today, by 0.77 percent overall. So investors are still buying ... not taking profits to spend in Boracay over Holy Week. You're right however, it's always difficult to predict the stock market as some of us have found out to our cost.

I'll stay with my prediction of a future steady increase, with the Philippine main board tracking the big overseas markets. The US stock indexes are all higher because Americans are spending again - same in Japan, China, Europe with no downturn on the horizon.

The momentum is still there. Stock prices continue to rise and the index closed for the week (to April 8, 2010) about 4 percent higher than last week. Property-based stocks look the strongest, outperforming the overall market by a wide margin led by the majors Ayala Land, Filinvest Land, Megaworld and Robinsons Land.

Ayala Corporation closed the week at 355 pesos per share, SM Investments 387.50 pesos, Ayala Land 14 pesos and Robinson 15.75 pesos. These prices are the highest in over two years.

Stocks prices 'correction'

Stock prices have slipped back this week (ended April 16, 2010), but only by a little bit, with the Philippine Stock Index closing at 3,265.54, about 1 percent lower.

I believe punters are taking a break after the recent big gains, just getting their breath back and watching the overall trends. Most forecasts are still upwards, especially in the property sector.

However, I hope the damage being done in Europe by that vocanic eruption and so many flights being canceled, with tourism and industrial disruption, etc., doesn't reach the Philippines.

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The market shows its strength
Philippine corporate stocks showed their resilience this week (ended May 8, 2010). Even with local election jitters, big problems in Europe and the freefall in US stock prices, the Manila market held its head up. The main-share Philippine Stock Exchange composite index lost only 25.77 points or 0.81 percent to close at 3,142.06 at week end. They were helped by selective bargain hunting after the week's rocky road.

For the full week, the index shed a total of 148.03 points or 4.5 percent mostly due to pre-election uncertainties, particularly on news that the voting machines were showing tech probems.

Be very careful however and hedge your bets. Nobody is really sure what lies ahead, with a hung parliament in Britain, the euro way down, the big slump in US stocks ... and of course our own elections in the Philippines.

G'luck all ...

Stocks up only slightly after elections
I'm surprised that stocks went up only a bit after the successful elections. The index went up just 0.2% (6.48 points) to 3,269.41. I was sure the surge would be bigger.

I reckon the market experts and the punters had already factored in successful elections. Or maybe they're still digesting the reality after the euphoria?

Stocks follow Wall Street down
Philippine stocks slumped as the week ended (May 20, 2010), following an overnight bloodbath in Wall Street caused by escalating concerns over a financial contagion in the Eurozone. The main-share Philippine Stock Exchange index shed 34.44 points or 1.07 percent to close at 3,179.36.

For the week, the index gave up 151.06 points or 4.5 percent, a turnaround from the previous week’s 5.99 percent post-election rally.

The index would have fallen further if not for a late-surge in bargain-hunting that shored up the PSEi from as low as 3,147 in intra-day trading. Value turnover amounted to P3.32 billion as investors deemed the market dips as a short-termcorrection.

There were 20 gainers as against 97 decliners and 52 unchanged stocks. The property, holding firms, financial and industrial counters took the heaviest beating. Local telecommunications giant PLDT, the country’s most valuable company, bucked the downtrend as bargain-hunters scooped up its shares. On the other hand, Metrobank, Aboitiz Equity Ventures, Ayala Land, Energy Development, First Gen, Megaworld and ICTSI ended lower.

Index is heading back up

Philippine stock prices are heading up again. They jumped this week (to May 28, 2010) amidst big gains on Wall Street and the strong performance of the Philippine economy in the first quarter. The Philippine Stock Exchange Index rose 2.4 percent this week.

ABS-CBN Broadcasting, the country's biggest media company, rose 2.7 percent to 38.50 pesos, the highest since August 2001. The company said advertising revenue may exceed 15 billion pesos this year. Filinvest Land, a home builder, gained 3.3 percent to 0.93 pesos after its shareholder Filinvest Development Corporation, boosted its stake with the acquisition of 13 million shares in the open market. ISM Communications. jumped 5 percent to 0.0525 pesos, its steepest gain since March 23 after San Miguel Corporation confirmed it is still in talks for the purchase of Eastern Communications Inc. from the company.

Another high

Philippine stock prices consolidated before pushing up to a new two-year high in the week just ended (to June 4, 2010), amidst optimism about the underlying domestic economy. The main-share Philippine Stock Exchange Index gained 1.82 points or 0.054 percent to close at 3,357.05.

This set a new milestone for the PSEI after its last peak of 3,447.29 on January 15, 2008. The index has gained 3.2 percent for the past week and nearly 10 percent since the start of this year.

Value turnover was heavy at 7.45 billion pesos on Frday, following a similar pattern through the week. Investors snapped up selective equities, betting on better times ahead following the successful conclusion of automated elections and healthy first-quarter economic growth.

The positive finish was led by the industrial counter, which rose 1.1 percent. Trading on holding firms and property issues was also strong, offsetting the weakness in services and mining/oil sectors.

New high predicted for share prices
Bloomberg

The Philippine stock index will extend a 30-month high and reach a record this year as remittances accelerate and the central bank keeps interest rates unchanged, according to a leading stockbroker. The benchmark will rise to 3,900 in 2010 as economic expansion gathers pace through next year, says Alex Pomento, a strategist at Macquarie Group’s Manila unit, which is the biggest foreign/owned stockbroker in the country. Macquarie handled 11 percent of Philippine stock trades last month, the most among foreign brokerages.

Banks and building firms will beat the index as record-low borrowing costs and increased repatriation of funds from overseas Filipinos drive demand for loans and homes, he predicts. “Faster growth means stronger corporate earnings, robust loan growth and a buoyant property market,” Pomento said.

The Philippine Stock Exchange Index has risen 13 percent this year, the third best performer among the 12 biggest Asia/Pacific markets. The measure has retreated 0.9 percent from a 30 month high on July 14, and remains 11 percent below its all-time high of 3,873.50 which it reached on October. 8, 2007.

Remittance growth quickened to 6.5 percent in May, the first acceleration in five months, says the Philippine central bank. It kept the benchmark interest rate at 4 percent and cut its inflation forecast for this year to 4 percent from 4.7 percent and lowered it to 3 percent from 3.6 percent for 2011.

The benchmark may stay below the record this year as “some investors are discounting these positive developments,” says Jonathan Ravelas, chief market strategist at Manila-based Banco de Oro Unibank. “A deterioration in the global economy and sovereign credits in Europe would trigger another round of corrections.”

The stock benchmark lost 6.8 percent in the seven trading sessions through to May 25 as investors cut their holdings of equities on concern austerity measures in Europe to cope with a sovereign debt crisis would derail a global economic recovery. Germany on May 19 banned naked short selling and speculation on European government bonds with credit-default swaps to calm markets, sparking investor anxiety about increasing regulation.

The US$167 billion Philippine economy’s growth, which weakened to 1.1 percent in 2009, will probably quicken up to 6 percent this year and 8 percent in 2011, the government said earlier this month. Funds from overseas Filipinos, which support consumer spending and account for a 10th of the economy, may rise 8 percent this year, the central bank forecasts.

Investors should “overweight” property and banks, Pomento recommends. Ayala Land, the largest builder, and Megaworld, the fourth biggest developer, are among his most recommended stocks this year. Other picks are Banco de Oro, the biggest bank by assets, Bank of the Philippine Islands, the No. 3 by assets, and Alliance Global Group, owner of Megaworld and the largest Philippine casino.

Those stocks will rise by between 18 percent and 30 percent from today through the end of the year, beating a projected 13 percent gain in the benchmark in the same period, Pomento believes.

Whether or not the stock market (in fact the whole Philippine economy) continues to soar and maybe reach "new record highs" depends very simply on one thing - whether the new Noynoy Aquino government does the right things, whether they can match their promise words with concrete, positive action.

As we've seen so many times, talk is easy but action is harder. This country would be great if we could just stop talking and get it right!

World forecast is for worse weather

Latest US trade figures show clearly that American exports are trouble. The stats sent the Dow Jones industrial average tumbling in a 265-point decline, moving it back into the red for the year. The broad US stock market fell 2.8 percent and is now down nearly 0.5 percent this year.

Those declines spread to Asia and Europe. This week European markets are flat or slightly down. Japan’s Nikkei index dropped more than 2 percent Thursday (August 12, 2010) before recovering some of the losses, which came after steep declines Wednesday in American and European equities. After the US Federal Reserve warned that the pace of recovery in the United States has slowed, news from China shows its fast-growing economy is cooling. Then the Bank of England reduced its already diminished forecast for the British economy.

Things don't look good on the international fronts. Let's see if the Philipines can steer clear of the heavy weather coming up.