Gus Cosio says so

Ideas on the Philippine Stock Market

It’s still going to be bumpy!

6:00pm  Tuesday  May 12, 2009  Manila

“Look at market fluctuations as your friend rather than your enemy.   Profit from folly rather than participate in it.”          –  Warren Buffet

The Manila market was down 11.64 points today or 0.51%.  We expected profit taking after all, so it wasn’t much of a surprise.  What was pleasantly received was TEL’s rise to 2235 where it traded most of the day, although it closed at 2225.  But, hey, that’s up from yesterday’s 2170.  Even GLO traded most of the day at 845 up from yesterday’s 830.  It closed at 840.

Most of the issues that were popularly followed in the past few days encountered some profit taking.  Fortunately, the market was not a one way street.  Even as you’re seeing ALI, AC, BPI, MBT, SMPH, MEG, FPH, MER and FLI coming off, you’ve got EDC, FGEN,  PNB, VLL,  SCC, and AP moving up together with the telcos.  Incidentally, don’t get thrown off by FLI’s decline to 0.64 because it just went ex-cash yesterday and paid 0.03 dividend making the adjusted price equal to 0.67.

I’d venture to say that we’ll probably see further profit taking.  If today’s shallow move is any indication, I think that our market is in good shape.

I mentioned Pepsi (PIP) in an earlier post.  PIP moved up to 1.20 today on reasonably good volume.  I cannot shed the idea off my mind that this stock pays 0.10 dividend.  That’s around 8.33% yield in a warm thirsty country like the Philippines.  Perhaps, that is what other investors are thinking as well.  There’s also this price gap between GMAP (closed 4.75) and GMA7 (4.90).  That gap has to close at some point.

In a meeting today, we had discussed a few small cap stocks such as TUNA, COAT, and PAX because of the potential that these stocks have due to their strong earnings outlook.  We’ll try to get more details to share about these issues since our figures show us that they are extremely undervalued.  We had also noted that FPH is trading around 50% of its book value and energy prices are friming slightly.  Anyway, the general idea is that if you go down the list of shares, there are a number of bargains that are available.

On the economic front, Philippine exports declined for a six months in a row, extending the longest slump period since March 2002.  Shipments dropped 30.9% year on year in March to $2.9 billion.  It already dropped 39% in February based on the National Statistics Office report earlier today.  In a Bloomberg News survey of 10 economists , the median forecast was for a 34.5 percent decline.  It looks like the decline in exports is slowing.

Looking at the market around us, Hongkong was up 0.38%, Shanghai – up 1.49%, Singapore – up 0.56%, Jakarta – up 0.62% and Thailand – up 1.75%.  So far, it does not seem that anxiety has gone up in the region.   As I write, the European markets are trading mixed to sideways.  The major markets are now looking to April retail sales figures in the U.S.  The consensus estimates for the data to be released on Wednesday forecast for overall sales to be flat, while the figure is expected to rise 0.2% if automobile sales are excluded.

I think we’re all aware that economic fundamentals in the West have not changed much although the markets are looking ahead for better times.  Like I said earlier, this may be a bumpy ride yet, but I never counted on a steep climb anyway.

Have a good day.


May 12, 2009 - Posted by | Financial markets in Asia

1 Comment »

  1. Great to see it in-sync with Facebook. Now I can get regular stock market updates.

    Comment by Lorenzo | May 13, 2009 | Reply

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