Gus Cosio says so

Ideas on the Philippine Stock Market

Some dogs may have their day yet

6:30pm  Thursday   3 December 2009    Philippine Stock Exchange Index  3090.91 (-0.93%)

With the market down today, I guess people are wondering what’s up next.  The play for PX is obviously over with MVP buying all of the Ongpin group holdings of PX at 21.   Do not forget, however, that MVP started buying PX at below 6 so his average is still below today’s market.  I understand that any tender offer possibilities has been avoided. The bad news is that PX will likely move lower over the next few days.

Among today’s most actively traded stock, only FPH, SMPH, and AGI showed gains.  Everything else was down.  What is disappointing is that the rest of the Asia-Pacific region’s markets were up today except for Shanghai.  It looks to me that with the M & A plays out of the way, a lot of excitement is leaving the market.  A little bird told me that the San Miguel group may also be selling out of MER now that MVP has outplayed everybody else’s hand including that of the belligerent GSIS head.  That probably explains why FPH went up today.

I see positive market move on 2 stocks that went opposite directions today.  AGI went up and AC went down.  What is interesting with AGI is that after being absent from the most active list for a few weeks, it has returned.  With AC, I see a big seller that has been unwinding his position causing this stock tobe very soft but if you notice the volume traded, this has been rising as the stock price went down.    AC also hasn’t been in the most active list for quite a while, but today, it is back in the list.  I am a strong believer of volume dynamics.  Stocks that have volume improvements after a period of neglect have a bright prospect for price appreciation.

As a prognosis, I think that markets will likely move sideways over the next few trading days.  I see some light selling in stocks like TEL, BPI, AGI, MBT & AP because people may be wanting to protect their profits.  The likely plays could be in the mining and construction because of the end of the play in PX and MER as it is in this sector where you have the laggards.  Would you believe that LC/LCB has lagged practically everything in the market?  So have CMT and HLCM.  Unfortunately, these stocks are not very liquid so one has to be careful. For the brave of heart, I think MPI might just show some excitement over the next few days.  I would avoid MER and PX though.  It looks to me that second-liners will start to attract trading again, so keep an eye on SPH and ACR.

December 3, 2009 - Posted by | Financial markets in Asia


  1. Hi Sir Gus!

    I have read somewhere that a large cross of a trending stock signifies that the trend is about to end.

    Based from your experience, is that true?


    Comment by Oliver Mia | December 4, 2009 | Reply

    • Oliver,
      The reason a block trade happens after a stock’s price has had a run up is because the block trade was previously agreed upon at the higher price. In that particular case, the short term run on the stock may have already ended. This is what we’re seeing in PX today. That was what we saw in MER when it hit above 300. In both these occasions, the block trade ended the run. You have to examine each situation differently though because there have been occasions when the block trade started the run which usually happens in an illiquid stock. In an occasion of this type, the block trade triggers the greater liquidity on the stock.

      Comment by Gus Cosio | December 6, 2009 | Reply

      • I see. Thanks Gus.

        It seems that the cross of 1,000,000 shares on PIP by Macquarie I notice a few days ago is a signal on the end of PIP’s short term run.

        Comment by Oliver Mia | December 8, 2009

  2. On an unrelated topic…
    Sir Gus, do you think there will be a massive selloff this Monday due to the Martial Law declaration in Mindanao? i’m quite worried with my positions in the market

    Comment by J | December 5, 2009 | Reply

  3. Hi J,
    I think that there may be some kind of a selling pressure but I don’t think a sell-off is in the cards. I don’t think this martial law in Maguindanao will last very long, but it will be a good reason to book some profits.

    Comment by Gus Cosio | December 6, 2009 | Reply

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: