Gus Cosio says so

Ideas on the Philippine Stock Market

In the back seat

12:15 am  Wednesday  28 July 2010

I am sitting back from the market for a while since I will be on the road again this week.  I’ll be doing some investment briefing to some people in Cebu on Thursday and Friday.  The good thing about detaching yourself from the market for a few days is that you can take a longer and wider view of what the outlook could be.

One thing that I found out from one of my research sources is that if we had decouple completely from the DJIA in the 2nd quarter, in these past few weeks of July, our correlation with the Dow is back to a level which is even slightly higher than in the first quarter.  I guess because the U.S. market has been getting a series of positive earnings surprises,  the constructiveness our own market was being reinforced.

When I try to take a look at the domestic front from both the macroeconomic perspective and the earnings forecasts of the stocks I follow, the landscape looks quite encouraging.  The thought makes it easy for me to just hold my positions while I try to ignore it for the next few days.

For those who may be curious of my plan for my PNB position over this week, I feel very comfortable holding it because, having thought about it earlier today, I would have been happy to buy the stock again today.  For stock like DGTL or MBT, they are also at levels that I am comfortable with, although i would like to pick up MBT perhaps 2 pesos lower.

I am also a bit surprised that TEL is cheap in Manila compared to its ADR in New York.  It may be because people are now expecting the peso to start gaining on the U.S. currency.  It is no wonder, as well, that RCB has spiked up.  It will be paying a second dividend for 2010 in the coming weeks.  Such a declaration gives impetus to the notion that quarterly earnings are rising.

Anyway, I’ll share more of my thoughts when I find some time while at rest during the week.  In the meantime, be careful, but be involved.

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July 27, 2010 - Posted by | Uncategorized

11 Comments »

  1. Hope the break will give you more zest and vigor to help traders, especially us newbies, understand the market well. Bon voyage!

    Comment by herecomesthebaby | July 28, 2010 | Reply

  2. Ey Gus,

    Be sure to try Cebu’s Lechon and seafoods =) Try CnT lechon or Zubuchon and STK or Golden Cowrie for a seafood feast =)

    Comment by Raymund | July 28, 2010 | Reply

  3. Thank you sir Gus for the inputs. I’m still holding my PNB. Have a nice trip.

    Comment by lai | July 28, 2010 | Reply

  4. Sir,

    Does it mean it’s ok to re-enter PNB at around 42.50 or should I wait for a little pullback? Thanks!

    Comment by trixia | July 28, 2010 | Reply

    • Hey Trixia,
      PNB @ 41.75

      Comment by Foreign Investor | July 28, 2010 | Reply

      • PNB is already at 41.55…. or is my market monitor going crazy? Everything is a bit fuzzy with the glitches

        Comment by wren | July 28, 2010

      • Correction… 40.65 if i’m not mistaken..

        Comment by wren | July 28, 2010

  5. @wren
    That is true..Same with RCBC which was mostly overbought in the past few days due to their dividends. mostly hot money is flowing into FLI

    Comment by Foreign Investor | July 28, 2010 | Reply

  6. Hi SIr Gus,

    Anything about FLI, I was surprised by its performance today. I never remember a day that FLI was traded like this.

    Will you recommend SMC considering their shares offering and 7% dividend yield?

    Thanks,

    Comment by Cliff | July 28, 2010 | Reply

    • Cliff,

      Remove the Php5.000 special dividend in computing your yield. This is the first time they declared this, once, this becomes regular like TEL, you can include it in your yield computation.

      Adjusted, the yield is only 1% for regular dividends.

      Comment by alexis | July 28, 2010 | Reply

  7. hi sir gus,

    please let me know if your in cebu already, this is my number-09175550249, it will be my priviledge to assist you (i can be a driver, tourist guide, etc) and if you have free time, i hope i can treat you for a dinner or lunch on friday. please let me know sir.

    Comment by draco23 | July 28, 2010 | Reply


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