Gus Cosio says so

Ideas on the Philippine Stock Market

Friday’s technical problems at the Philippine Stock Exchange was inexcusable.  There are a number of reasons why our market is hardly given the time of day by the global investment giants and this kind of incompetence by those who rn the exchange is one of these reasons.  There is just no two ways about it.  If there is little reliability in the service delivery system, we cannot expect steady patronage and the ensuing steady growth.  A lot of domestic investors were very frustrated particularly because the markets all around us were rallying and those who wanted to take on new positions could not do anything but sit in their hands.  What frustration.  The information flow was even so skewed that the monitoring of the index cold not even be done.  There ought to be a law that would compensate investors when fiascoes like these happens because there were a lot of lost opportunities.

The equity markets all over the globe did well Friday and even had a very strong finish in New York.

March 5, 2010 - Posted by | Financial markets in Asia


  1. Maybe they should have started using the new trading system already.

    Comment by Warren | March 6, 2010 | Reply

    • Warren,
      the new trading system is another issue. It should have been on board last September. I don’t know what’s keeping it. The system is supposed to be the same as the New York Stock Exchange. I hope we get to use it soon.

      Comment by Gus Cosio | March 7, 2010 | Reply

  2. I totally agree with your opinion Gus… I am here in the middle east and have to wake up at 4AM (9AM Manila Time) just to get ready for the day trade.. Looking at the opening in Nikkie up 2% last friday got me very excited only to find out that trading was off due to tech’l glitch ( whatever that means)!.. it was indeed really very very frustrating…Just the inconvenience,,, watching one of my stock up 8% for the day, i was ready to jump the gun but i cant!!!.. only to see the gain evaporate in an hour… What a bummer!

    Comment by mike | March 6, 2010 | Reply

    • Hey Mike,
      Don’t be discouraged by these things. Actually, it had been a big embarrassment for the Exchange yesterday because it was a listing day of Petron’s 10 billion peso preferred shares. They had a ceremonial bell ringing but no trades could be done. Nakaka-inis.

      Comment by Gus Cosio | March 6, 2010 | Reply

  3. I agree, I was so frustrated during that day, and ended up making some bad decisions just calling the broker from the phone. It’s scary how you can authorize transactions like that without them asking you anything about yourself, not even your birthday or mother’s maiden name… unfortunately I didn’t realize the lack of proper controls until after I made my sale, since by then my frustrations were gone 😛

    Comment by wren | March 6, 2010 | Reply

    • Wren,
      I felt so frustrated last Friday that I chose it better not to try to chase any trades. I’ve been around sophisticated traders in my previous stints abroad and one of the things I learned was never to force a trade. It is next to impossible to profit from a trade that you are not comfortable doing. Remember, everyday is a new day. In the trading business, as long as prices are moving, there are opportunities.

      Comment by Gus Cosio | March 7, 2010 | Reply

  4. Gus should be the Philippine President! Gus Cosio for 2010!!!

    Comment by JimBoy | March 6, 2010 | Reply

    • Nice joke, JimBoy.

      Comment by Gus Cosio | March 6, 2010 | Reply

  5. hehe gus, as a sun cellular subscriber, i like their services, and i feel like its going to have big growth in the future, since DGTL owns Sun Cellular, do you think this stock is a good buy? tnx gus

    Comment by JimBoy | March 6, 2010 | Reply

    • Jim,
      In the distant past, I was very hopeful about DGTL but both the company and the stock did not perform. You’ll have to look deeper into the company now since a lot appear to have changed. I know for a fact that the viable subscriber base for a cellular company is around 1 million users. From what I’ve heard, Sun already has 10 million so they should be more than viable. From one analyst report, it looks like they’ve been chipping away GLOBE’s subscriber base. Perhaps, you can give a call or shoot out an email to their investors relations for facts and figures that you are curious about. This way you do not just rely on hunches but on hard facts.

      Comment by Gus Cosio | March 7, 2010 | Reply

  6. and a follow up question, about JGS, since it owns 47.45% of DGTL, and owns a decent part of other companies such as URC, RLC etc. why not buy this stock directly? hmmmm.. just some questions popping out of my mind.

    Comment by JimBoy | March 6, 2010 | Reply

    • In my view, you must follow the price relationship between JGS and URC and RLC closely. That way, you can determine when JGS is cheap vs. the two. You can be a specialist on this arbitrage trade.

      Comment by Gus Cosio | March 7, 2010 | Reply

  7. You are right, the incompetence is unforgivable. Gus Cosio for President! you now have 2 votes 😛

    Keep writing, i’m constantly reading your blogs. Here is my own forecast, VLL will go down in the next few trading days.

    Comment by Chris | March 6, 2010 | Reply

    • Yes, when I’m president, I’ll decree that stock prices should not come down, not even VLL.

      Comment by Gus Cosio | March 7, 2010 | Reply

  8. We are trading in the PSE guys, unfortunately Philippines is still in fact a third world country. Parang Metrobank lang yan “stone age” ang mga gamit pero we know it’s the best bank in the Phil., cheers!

    Comment by Ryan | March 6, 2010 | Reply

    • Yes Ryan, we just have to do the most we can given the limitations of this market. I’ve been trading this market actively for 15 years. It has been slow in developing but I can categorically say, we’ve made good inroads over the last 5 years. The Philippine stock market compared to itself 5 years ago in terms of critical mass and and liquidity is measurably better. I, too, am a bit impatient at the slow progress but there are patriotic issues on top of commercial ones.

      Comment by Gus Cosio | March 7, 2010 | Reply

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