Gus Cosio says so

Ideas on the Philippine Stock Market

Another day, another rally

6:40pm Monday   10 August 2009   Philippine Stock exchange Index  2850.58 (+2.43%)

Stocks opened higher from the start of trade.  MER and TEL took center stage practically through out the day.  The message was “you’ve got to be in to enjoy the ride.”  In hindsight, the pullback last Friday was but an opportunity to buy, and those that wanted in just bought everything in sight.

How much more bullish can we get?  The answer is in the individual stocks.  People are buying MER and PX because they are both in play.  Buying TEL, FLI or AC, on the other hand, is just like buying the market in general.  There is little more to say but simply to be a little careful because when markets are as strong as this, investors tend to throw caution to the wind.  People tend to look at more speculative plays.  If there are juggernauts like MER, people just buy the stock without an exit target.  The writing is on the wall for this stock – 300 – and there is no secret to it.  Same is true for PX but the play has not indicated a target.  I’d be very careful though because with every play, there are those who get sucked in without knowing that the play is in its end-game already.

To be safe, I would prefer to go for those that are revealing strong fundamentals yet are under appreciated by the market yet.  These would be PNB, EEI, TUNA and SPH.  There would also be FPH, FGEN and EDC that continue to show promise.  Of course, banks and property stories revolve around the low interest environment because the level of interest rates will likely persist for the rest of the year.

My strongest advise in stocks that are not in play is to not consider selling yet without looking at their historical prices and values.  Most of the good ones are relatively cheap historically and I consider that the risk reward picture looks relatively safe.  The fly in the ointment is if the global markets tank in a big way.  Otherwise, it is really a good market for investors.

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August 10, 2009 - Posted by | Financial markets in Asia

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