Posts Tagged ‘stock trade’

Stock Market Investing Tips and Seminars

Have you already heard people say that you can make a lot of money in stocks ? Well such rumors are not false at all. If you know how to invest in stocks, you can make lots of money.

For 2009 the Philippine stock market exchange index was up by more than 60 %. If you had invested in the stock market January of 2009 until December of 2009, your 1 million peso investment would have gained you more than P 600,000.00 !

Warren Buffett, is undoubtedly the world’s best stock market investor and perhaps the only Read more…

How To Invest Stock Market?

To invest stock market one is not qualify when he can have faint of heart.

Read more...

Ten Principles of Investing

I got this Ten (10) Principles of Investing from Freeinvestmentreport.com. I would like to share it. This is one way to condition our minds in terms of stock investing. Hope this helps!

1. 1. Start investing now. You could be getting better returns on your money today to prepare yourself financially for your future.
2. 2. Make a financial plan. You must know what your goals are to be a successful investor.
3. 3. Do not follow the crowd. When investing, do what the wealthy do and look for opportunities to get in before the masses.
4. 4. Don’t overpay for stocks simply because the companies behind them are large and well known. Too many large companies are overvalued, and their prices will eventually fall back to earth.
5. 5. Have patience when investing. Wait for the right time to enter and exit your trades.
6. 6. Research, research, research. And if you can’t do your own research, seek advice from experienced professionals who specialize in the markets.
7. 7.Remember that all big companies were once small companies. Look for high-potential opportunities in the micro cap and small cap sectors.
8. 8. Be cautious when investing borrowed money. Your investments can fluctuate in value, whereas the money you borrow must be paid back in full.
9. 9. Don’t put all your money in one place. To protect yourself, make certain your portfolio is diversified across a number of unrelated financial instruments.
10. 10. If necessary, close out losings investments to cut your losses. Stocks do not always bounce back.

Entry Credit: http://www.freeinvestmentreport.com

Trading Band Exemptions for Some Stocks

The Philippine Stock Exchange (PSE) approved in August 2009 rules to exempt certain stocks from the price trading band or the limit in the increases or decreases of stock prices within the day.

Trading band: Max 50% price increase; max 40% price decrease

Stocks traded on the PSE currently have a limit of 50% in terms of price increases (price ceiling) and 40% in price decreases (price floor). This trading band is supposedly installed to protect investors from price volatility.

With the August 26 memorandum, the PSE agreed to lift the trading band in the following scenarios:

1. When trading resumes for securities that have been suspended for a period of one year or more;
2. When the Exchange determines that: (a) there has been an event or occurrence that may cause the price of the security to change drastically; or (b) the application of the trading band on the price may render impractical the trading of the security upon prior notice by the Exchange as may be warranted under the circumstances.

Stockbrokers see a benefit to the trading band exemption primarily with regard to the first scenario because, according to them, a stock suspended for more than a year will have to catch up with its fair market value upon resumption of trading.

Read more at pinoymoneytalk.com

Safest Way To Invest

The featured article below would help those confuse people who got the money to invest but don’t know or have any idea on where to put it or perhaps just reluctant in finding the safest way to invest.
Take the query below as well as the answer to Edwin’s question.

Q: What’s the best way to save these days? I am expecting a big amount of money to come from the sale of a lot we’ve had in the family for a long time. With the global economic crisis affecting our economy, I want to play it safe yet grow my money. – Edwin

A: It’s good that you are thinking of protecting your money (your capital) by investing the proceeds from the sale of your lot. Investing your money may make it grow over time.

Understand, though, that with investing comes risks and rewards. If you want your investment to grow and yield higher possible returns on your investment, be prepared to meet setbacks and losses if they happen. Investments that yield higher returns come with higher risks such as heavy losses, as what stock market investors have realized last year at the height of the global financial crisis. Investments that have low risks may more or less safeguard your capital but give you low rewards as well (low interest income or minimal capital gains).

Bank deposits and government securities may offer you relatively safe investment options.

Bank deposits take the form of savings accounts, interest-bearing checking accounts, and time deposits. You deposit your cash in the bank and you get interest back after a month or so. While this may seem to be safe and will preserve your investment, this may not actually be the case as inflation may eat into your investment.

The current rate for savings accounts, for instance, is about 0.75 percent per annum. The inflation rate is way higher than that, which means that the growth to be yielded by your investment in a savings account will be overtaken by the rise in prices of commodities.

Time deposits may give better rates, but still may not be enough to match the cost of inflation. You may need to keep your money on deposit for a longer term to achieve a higher rate of return.

As “The Citibank Guide to Building Personal Wealth” (a book published by Citibank) says, “Inflation is a major risk if you hold large sums of cash permanently, because it reduces the buying power of cash.” Put simply, inflation may erode the value of your investments over time.

We mentioned government securities above. These come in the form of treasury bills, treasury notes, and treasury bonds. Bills have the shorter term (less than a year), and bonds have the longest term. Government securities are generally low risk since the government guarantees to meet its obligations and pay the published interest rate.

But since you mentioned that you want to grow your money, it may be wise to look into other forms of investment as well to achieve your goals:

1. Stocks or equities may give you high possible returns over the long term, but these come with high risk, which you don’t seem to want to assume at this time.
2. Bonds may also give you good rates of return, but these also come with some form of risk, although lower than that of stocks.
3. Pooled funds come in the form of mutual funds or unit investment trust funds (UITFs) and depending on their nature may be invested in stocks alone, bonds alone, money market funds (government securities and commercial papers), or a combination of these.

To keep your money safe and make it grow at the same time, we advise that you do what wise investors have been doing all along: Diversify! Keep some funds in bank deposits, some in government securities, and some in pooled funds. Since you may have other financial goals and may have a timetable in needing your funds later on (example, for retirement), we advise that you consult a financial professional who will assess your risk profile and suggest the best possible allocation of your investments.

You may also invest your money in tangible assets such as real estate property. However, market values fluctuate over time, so be prepared for any eventuality. Investing in a business also comes with a high risk as not all businesses realize income. Jewelry and art are also forms of investment, but bear in mind that it may take a while for their value to increase. Converting them to cash may also take a longer time should you find the need to do so.

Whatever investments you go into, study all aspects thoroughly. Look into the pros and cons before deciding. We wish you the best.
Entry Credit: http://business.inquirer.net/

*Disclaimer: Those who happened to read the article above are solely responsible for their own investment decisions and should consult professional advice from financial experts or analysts.Thegetwealthy.com will not be liable for any loss or damage caused by a reader’s reliance on information obtained from our web site. Thegetwealthy.com receives no compensation of any kind from companies or industries or funds that are mentioned above.

Stock Picks: Time to buy LC stocks!

August 27, 2009-We are looking forward in buying some shares of Lepanto Consolidated Mining Co. (LC) as the price is ranging from  0.27 to  0 .29 this week! It will be a buy signal if it’ll go down to .26 or even at .27. The highest price LC has reached in a 30-day period is 0.32 and it’s lowest is at 0.175.

Buy LC shares now! Board lot is 10,000 shares. Target to sell LC shares at 0.40!

BUSINESS PROFILE

Lepanto Consolidated Mining Company (LC) was incorporated in 1936 and operated an enargite copper mine until 1997, after which, LC shifted to gold bullion production through its Victoria Project. LC also operated a copper flotation plant from August 2000 to December 2001, and restarted it in late 2006. LC sells its gold and silver bullion production to Heraeus Ltd. (Hong Kong) while its copper concentrate production are sold through Trafigura Beheer B.V. Amsterdam and Shanghang County Jinshen Trading Co., which are metals traders based in New Jersey, USA, and Fujian, China, respectively.

LC and its subsidiaries are involved in other businesses such as hauling, diamond drilling services, insurance, and manufacture of diamond tools. LC has two Mineral Production and Sharing Agreements for areas located in Mankayan, Benguet. The company’s subsidiaries are Shipside, Inc., Diamond Drilling Corporation of the Philippines, Lepanto Investment and Development Corporation, Diamant Boart Philippines, Inc., and Far Southeast Gold Resources, Inc.

Source: SEC Form 17-A (2008)

Happy Trading!

-Bullish Trader

Stock Picks: PERC is hot today!

August 26, 2009- I was able to materialize profit today when I sold all my shares of PETROENERGY RES. CORP. (PERC) at P7.50 when I bought it a few weeks ago at P5.60. That’s 32% rate of interest in almost 3 weeks!

It rallied today! The lowest trade is at P6.20 and the highest is at P7.60. The price of P7.60 is the highest it reached within the 30 day period. Well, not bad for moi when I traded my PERC shares at P7.50. It’s profit-taking day for moi!

Its closing price is at P6.80! I will be waiting for it to go down in the next days to come so I could buy it again at a lower price. The news is still helpful. PERC will be a good one to start with!

BUSINESS PROFILE

PetroEnergy Resources Corporation (PERC), formerly Petrotech Consultants, Inc., was organized on September 29, 1994 to provide specialized technical services to companies exploring for oil in the Philippines. On June 25, 1999, the Department of Energy authorized the assumption by PERC of Philippine oil exploration contracts. The Ministry of Energy of Gabon, Africa had also been duly notified of the transfer to PERC of a Production Sharing Contract covering the Etame discovery block in the Atlantic shelf.

The principal properties of PERC consist of various oil areas located in the Philippines and in Gabon, Africa. PERC’s local Service Contracts are located in Northwest Palawan, Offshore Mindoro and East Visayan Sea. PERC derives its revenues from its Gabon operations. The Philippine contracts are in the exploration stage and some contracts are being farmed out to reduce risk inherent to the business.

Source: SEC Form 17-A (2008)

Today’s Stock Buzz- August 21, 2009

Investors secure gains ahead of weekend

SHARE PRICES closed lower on Thursday after investors booked profits ahead of the long weekend, analysts said.

The benchmark Philippine Stock Exchange index (PSEi) slipped by 1.47% or 40.71 points to 2,720.18, while the all shares index shed 1.2% or 21.34 points to 1,744.29.

A total of 3.58 billion shares worth P4.25 billion were traded. Net foreign buying totaled P332 million.

Decliners led advancers 71 to 32, while 55 shares did not move.

“The trading week is shorter so it was already expected that investors [would not be] as aggressive,” 2TradeAsia.com said.

“Investors were also checking for ’momentum progression’ that was absent during the past trading days.”

The online brokerage noted there wasn’t enough buying momentum that would have encouraged investors to enter the market. In the past five trading sessions, for instance, the market rose only once and the gain was not even significant.

The composite index managed to gain 29 points on Wednesday on bargain hunting but this failed to prevent the PSEi from sliding. The index lost 4.77% week-on-week.

Jun B. Calaycay of Accord Capital Equities Corp. said investors also remain “sensitive” to market declines after experiencing a “big scare” last year when the market shed almost half of its value.

“[Yesterday] was also the first day of the ghost month. So traditional thinkers tried to avoid the market ahead of the long holiday, especially since Wall Street continues to be volatile,” he said.

Investors, Mr. Calaycay said, will monitor how the US market will do during the break before charting their next moves.

Wall Street closed higher on Wednesday after crude prices for September delivery jumped by 4.7% or $3.23 to close at $72.42 a barrel on the New York Mercantile Exchange. This was after the US government’s weekly inventory showed that crude oil supplies fell last week.

The Dow Jones industrial average rose by 0.66% or 61.22 points to 9,279.16 after investors scooped up oil-related firms on anticipation that demand for crude would rise.

The Standard & Poor’s 500 index added 0.69% or 6.79 points to 996.46, while the Nasdaq composite index rallied by 0.68% or 13.32 points to 1,969.24.

At home, however, mining and oil stocks led the losers, retreating by 2.33% or 190.54 points to 7,985.75.

Industrial stocks fell by 2.26% or 91.30 points to 3,944.18, while the service sector slid by 1.25% or 17.76 points to 1,397.08.

The property sector tumbled by 1.23% or 12.03 points to 964.72, while holding companies shed 0.87% or 13.33 points to 1,518.44.

Financial firms lost 0.1% or 0.64 point to 592.84.

Manila Electric Co. shed 5.31% or P11 to P196, while Lopez-led holding company Benpres Holdings Corp. dropped 5.26% or 20 centavos to settle at P3.60.

Benpres unit First Philippine Holdings Corp. slipped by 3.52% or P1.50 to P41, while Andrew Tan-led property company Megaworld Corp. was down by 3.12% or four centavos to P1.24.

Philex Mining Corp. declined by 2.43% or 25 centavos to P10, while index heavyweight Philippine Long Distance Telephone Co. dipped by 1.63% or P40 to P2,405.

Ty-led Metropolitan Bank & Trust Co. shed 1.33% or 50 centavos to P37, while Lopez-led Energy Development Corp. lost 1.14% or five centavos to P4.30.

Ayala Land, Inc. did not move at P9.70, while the Bank of the Philippine Islands stayed at P43.50.

Entry Credit: http://www.bworldonline.com

Today’s Stock Buzz- August 20, 2009

Bargain hunting ensues after downturn

SHARE PRICES closed 1.07% higher yesterday due to bargain hunting following a three-day downturn, dealers said.

The Philippine Stock Exchange index closed 29.34 points higher at 2,760.89. The all shares index rose by 1.07% or 18.79 points to 1,765.63.

A total of 2.89 billion shares worth P3 billion changed hands.

Advancers led losers 89 to 22, while 47 issues closed unchanged.

“Tomorrow, we expect the market to continue its reversal,” Ron Rodrigo of DBP-Daiwa Securities told Dow Jones Newswires.

Analysts also pointed out that the market’s rebound yesterday resulted from the US market’s recovery on Tuesday night.

“As expected, the market turned green due to the Dow’s recovery due to better-than-expected results of some retail companies and positive news about Germany’s economy,” said Daniel C. Picache of Papa Securities.

“This was inspired by recovery of the Dow in the US. It was just a relief rally from the profit taking in the past two days,” said Astro C. del Castillo of First Grade Holdings, Inc.

He added that speculation on some stocks because of rumored interest by specific parties also pushed the rebound.

The Dow Jones industrial average finished 82.60 points or 0.90% higher at 9,217.94 after a sell-off on Monday night.

The Standard & Poor’s 500 and the Nasdaq composite index similarly rose, each moving up a percent to 989.67 and 1,955.92, respectively.

Mr. Picache said late trading on Tuesday already gave signs of a rebound since there were already signs of bargain hunting especially on Lopez-led companies.

“But with a long holiday coming, it may lead investors to trim their positions. They may adopt a sell-on rally stance today, which may result in consolidation,” he said.

Mr. Picache placed the support level at 2,693 and the resistance at 2,984.

“The two-day correction already gave investors enough room to reenter the market… Buyers won’t be as aggressive as before though],” he said.

Mr. Picache noted there is still money on the sidelines since some investors were not able to get in when the market staged its run-up from the 1,800 level.

Mr. del Castillo said the market would probably hover at the 2,700 level as investors continue to digest numbers and look overseas for direction.

Mining and oil companies climbed the sharpest, going up by 3.47% or 274.52 points to 8,176.29, followed by property shares that rose by 2.39% or 22.79 points to 976.75.

Shares of service firms finished 20.15 points higher at 1,414.84, while holding companies inched up by 1.08% or 16.31 points to 1,531,77.

Industrial companies improved by 0.59% or 23.98 points to 4,035.48, while financial firms closed at 593.48, up 0.29% or 1.75 points.

Lopez holding firm Benpres Holdings Corp. climbed by 7.04% or 25 centavos to P3.80, while the Manila Electric Co. was flat at P207.

Market heavyweight Philippine Long Distance Co. closed 1.24% higher or P30 up to P2,445.

Banco de Oro Unibank, Inc., the country’s largest bank, went up 1.47% or 50 centavos to P34.50, while Ayala Corp. was steady at P297.50.

Harry G. Liu of Summit Securities, Inc. said that with the market having reached its targets, its direction would be dictated by market movements abroad.

“[What’s happening is] base building for the medium term so that the long term would catch up in anticipation that the global slide is improving,” he said. — AFP and Don Gil K. Carreon
Entry Credit: http://www.bworldonline.com

TAKE PROFITS!- Absolutetraders.com

“Take profits” is what stock mavericks of absolutetraders.com is recommending! Although the PSEi is on a short correction mode, there is a positive way that it will be bullish on the next days to come!

The nearest level of resistance for PSEi is at 2890. The MACD (below) indicates a short sell for traders. Weeeh!

So, if you find a perfect time to sell you shares, go on before the final day of the ghost month will change your portfolios.

Rule: Buy low, Sell high!

Links:

www.absolutetraders.com

Happy Trading! – Bullish Trader

Stock Picks: MEG, looking forward to it!

When I started to join the stock market last June 2009, I was advised by my mentor to buy Megaworld (MEG) and Manila Water Company (MWC) stocks. I initially acquired 5000 shares of MEG at P 1.12 and 100 shares of MWC at P 14. And on July 7, 2009, I stopped buying MEG shares as I don’t have funds anymore. Actually, just exhausted my salary payout with some stuff. As of August 3, 2009, I sold out all my shares of MEG and retained my MWC shares. In the span of 2 months, I got 30% profit/gain from what I initially invested for MEG. That’s why I got saving my money thru this scheme.

I acquired a total of 43000 shares of MEG at an average price of P1.092857 with a gross amount (excluding tax) of P 46,240. On August 3, 2009 at the peak of its high price when the local stock market seems bullish with its up trend in all major shares, I decided to sell all my MEG shares at P1.42 and it gives a gross total sale of P 59660. So that’s a 30% profit-taking!

Days after I sold all my shares at MEG, its NAV went down to 1.38 and below. Currently, I have invested the other proceeds in buying shares from Filinvest Land Inc (FLI), GMA Networks Inc (GMA7), Philex Mining Corporation (PX), Petroenergy Reserve Corp (PERC) and Meralco (MER).

As of the moment, still waiting for MEG to go down like P 1.20 and I will definitely buy lots of shares at one time!

Happy Trading!-Bullish Trader

Today’s Stock Buzz- August 19, 2009

US market slump drags down share prices

SHARE PRICES fell further yesterday, pulled down by the chain reaction of sell-offs that started in regional bourses in Asia on Monday on news that China plans to tighten bank lending, analysts said.

The benchmark Philippine Stock Exchange index closed down by 1.43% or 39.63 points to 2,731.55, while the all shares index slipped by 17.14 points to 1,746.84.

A total of 4.07 billion shares worth P3.19 billion changed hands. Decliners led advancers 72 to 33, while 55 did not move.

Jose Mari B. Lacson of Campos, Lanuza & Co. said the local bourse’s slide yesterday was caused by the decline in the US market, which itself was partly due to the weakening of regional bourses on Monday.

“The drop yesterday had a feedback loop… Markets in Asia performed weakly on Monday and it continued to the US and then affected us,” he said.

The Dow Jones industrial average finished at 9,135.34, down by 2% or 186.06 points. The Standard & Poor’s (S&P) 500 index gave up 2.43% or 24.36 points to end at 979.73, while the Nasdaq Composite index plunged by 2.75% or 54.68 points to 1,930.84.

Reuters reported that it was the Dow and S&P 500’s worst one-day percentage sell-offs since July 2.

Mr. Lacson said this was triggered by talks that the Chinese government would increase lending rates, signaling US investors to sell on concerns that the move would slow down that country’s growth.

The Shanghai stock exchange tumbled almost 6% on Monday, as investors grew anxious over the government’s plan there to tighten lending.

Oliver P. Plana of Asiasec Equities, Inc. said aside from the US market’s fall, the local bourse was also hit by the decision of foreign funds to sell their holdings, after the major companies disclosed their earnings.

Mr. Lacson agreed investors parted with their shares after the release of their first-half performance, which did not meet expectations.

“There are underlying concerns about the earnings in the Philippines since some of the reports were below expectations and cautions were made that the worst is not over… The sentiment is really to take profits so unless we see something that could change that, the selling would continue,” he said.

Mr. Plana noted that there were signs that some major markets in the region are improving, which could prop up local trading.

“The next major macro announcement is the [economic growth results for the first half on Aug. 27]…. So investors would observe day-to-day developments to guide them,” he said.

Holding firms were the only ones to end in green, inching up by 0.04% or 0.73 point to 1,515.46.

Mining and oil companies lost 1.91% or 153.65 points to 7,901.77 followed by service firms, which gave up 1.89% or 27.01 points to 1,394.69.

Shares of financial companies slid by 1.09% or 6.50 points to 591.73, industrial firms declined by 1.08% or 43.96 points to 4,011.50, and the property sector dipped by 0.78% or 7.53 points to 953.96.

Index heavyweight Philippine Long Distance Telephone Co. lost P55 or 2.23% to end at P2,415, while competitor Globe Telecom, Inc. shed 2.02% or P20 lower at P970.

Metropolitan Trust Bank & Trust Co. was unchanged at P37, while Sy-led Banco de Oro Unibank, Inc. declined by 1.45% or 50 centavos to P34. The Bank of the Philippine Islands eased by 2.19% or P1 to P44.50.

Jollibee Foods Corp. moved up by 1.96% or P1 to P52.

Entry Credit: http://www.bworldonline.com

Today’s Stock Buzz- August 18, 2009

Prices tumble after investors cash in gains

SHARE PRICES closed 2.77% lower yesterday, hurt by weak US sentiment and investors cashing in ahead of the part of the lunar calendar that the Chinese consider unlucky, dealers said.

The benchmark Philippine Stock Exchange index lost 78.83 points to 2,771.18, its lowest level in three weeks, while the all shares index gave up 43 points or 2.38% to 1,763.98.

Turnover reached 3.94 billion shares worth P3.23 billion, with 114 issues down, 16 up and 24 unchanged.

“US consumer confidence was weak, and while Japan’s economy improved, there was still a negative spin to it,” Jose Vistan of AB Capital Securities told Dow Jones Newswires.

He expects further consolidation with the start on Aug. 20 of the so-called Chinese “ghost” month that is usually a slow period for Philippine equities.

Jasper M. Jimenez of BDO Securities said profit taking was evident in the huge discrepancy between losers and gainers.

“That’s [a reflection of] the sentiment now. Some investors were already expecting this last week but the market continued to be resilient,” he said.

He also pointed out that the fall in Wall Street stocks on Friday contributed to yesterday’s turnout. “It was also partly a reaction to the performance of the US market last Friday,” he pointed out.

US stocks closed lower on Friday on a report that consumer confidence fell in August. The Dow Jones industrial average lost 76.79 points to 9,321.40.

Eunika B. Maloles of 2TradeAsia.com said the market’s fall yesterday was expected especially since the mining and oil sector had a steep climb last week.

“There was broad-based profit taking and correction in all sectors led by mining since its run-up was steep last week, she said.

Mr. Jimenez said the bourse may remain at its current levels, with no fresh leads to perk up trading and with August historically a slow time for the market.

“I don’t expect the bourse to move up significantly. The market bias is really negative,” he said.

Ms. Maloles also expects lukewarm participation among investors this week due to the absence of leads and a shorter trading week.

The market will be closed on Friday in observance of martial law-era hero Benigno S. Aquino, Jr.’s death anniversary.

Ms. Maloles, however, noted that the bourse’s steep fall yesterday may prompt a rally within the week.

“The decline yesterday was pretty sharp, so we could expect a rally the next few days… We need this correction though to further push up the market in the medium term,” she said.

Mining and oil companies had the sharpest fall, tumbling 3.52% or 293.69 points to 8,055.42 followed by industrial firms, which dropped by 3.14% or 131.36 to 4,055.46.

Property shares lost 3.02% or 29.96 points to finish at 961.49, while service companies declined by 2.98% or 43.65 points to 1,421.70.

Holding firms dipped by 2.31% or 35.80 to 1,514.73, while financial stocks slipped by 1.82% or 11.06 or 598.23.

Ayala Corp. lost P7.50 or 2.4% to finish at P300, while units Bank of the Philippine Islands and Ayala Land, Inc. finished 50 and 20 centavos lower, respectively, at P45.50 and P9.40.

The country’s largest bank, Sy-led Banco de Oro Unibank, Inc. shed 1.43% or 50 centavos to P34.50, while SM Investments Corp.’s shares dipped by 2.31% or P7.50 to P317.50.

Index heavyweight Philippine Long Distance Telephone Co. lost P75 or 2.95% to end at P2,470.

The Manila Electric Co., on the other hand, shed 3.59% or P8 to close at P215. — AFP and Don Gil K. Carreon

Entry Credit: http://www.bworldonline.com

Profit-taking for the Local Stock Market

Since many are taking advantage with most of their investments due to profit-taking in the past week, we are expecting that the local stock market to pull lower. This is what we see from our point of view. Check the article below and say your piece:

LOCAL STOCKS ARE SEEN becoming increasingly vulnerable to profit-taking despite the rosy economic backdrop here and abroad, analysts said.

The main-share Philippine Stock Exchange index rose 2.41 percent last week to 2,850.01 after the Federal Reserve said the recession gripping the United States was easing.

“There are two bright spots in the fundamentalists’ glasses today. First, inflation is at record lows. Second, this has pulled policy interest rates to similar levels as well. Furthermore, there are other bright spots developing. Most recently, although exports were reported to continue to slow, the pace at which it does has dissipated. Concerns on the budget gap for this year has largely been addressed with the successful bond float,” said Justino Calaycay Jr., a dealer at Accord Capital Equities.

He said corporate earnings did not look too bad as listed firms remained generally profitable and profit levels were “a lot more hope-inducing” in the second quarter compared to the first.

“Yet, the charts suggests caution. Technicians are singing the correction chorus. Indeed, we are currently enjoying a 50-percent year-to-date gain, give or take. While such is evidence of the magnitude of the positive sentiment, it alternatively raises the flag with ‘beware’ boldly written on it. A decline of a big magnitude is not entirely discounted,” Calaycay said.

Calaycay added that the market could go either way but noted that the bias would be toward a downside in the near-term but over the medium- to long-term, the momentum was still favorable.

Banco de Oro Unibank chief strategist Jonathan Ravelas said last week’s close suggested a test of the 2,875 to 2,900 levels.

“However, trading volume shows the current rally is waning. This is supportive of a topping out market,” Ravelas said.

A clear break of 2,780 would suggest that a reversal was in place, Ravelas said. Doris C. Dumlao

Entry Credit: http://business.inquirer.net

Today’s Stock Buzz- August 17, 2009

Mixed trading expected on lack of catalysts

THE LOCAL market is expected to continue trading within its current range as some investors might book profits due to lack of catalysts.

Analysts, however, said select issues might trim the market’s losses or help it close higher.

“For [this] week, the market is expected to take a breather on lack of catalysts as the central bank has already hinted there will be no rate movement when they meet on [Thursday],” DBP-Daiwa Securities, Inc. said.

The brokerage said this, along with a shortened trading week, would make investors wary of entering the market or allowing their investments to stay long in equities.

There will be no trading on Friday, which is a holiday to commemorate the death anniversary of Benigno “Ninoy” Aquino, Jr.

Selling, DBP-Daiwa Securities noted, had become evident since last week, with foreign investors posting a net selling of P1.15 billion, reversing the P707 billion in net buying the previous week.

“[They] have started taking advantage of the market’s recent rallies [as an opportunity to book their gains],” it said.

DBP-Daiwa Securities also pointed out that as far as seasonal factors are concerned, August has never been on the side of investors since historical data during the past 21 years showed the market declining during this “ghost” month.

With activity expected to slow down this week, Prince Anthony A. Yeung of AB Capital Securities, Inc. said buying would likely be focused on “select stocks with specific plays,” especially now that it remains to be seen whether the US market’s main indices could post new highs.

The US market closed lower on Friday after reports showed that consumer confidence slipped during the early part of the month. The Dow Jones industrial average shed 0.82% or 76.79 points to 9,321.40.

The Standard & Poor’s 500 index dipped by 0.85% or 8.64 points to 1,004.09, while the Nasdaq composite index shed 1.19% or 23.83 points to 1,985.52.

Despite some investors booking their gains last week, the Philippine Stock Exchange index managed to close 2.41% higher week-on-week to settle at 2,850.01.

For this week, however, Mr. Yeung said: “On the local front, there also would not be much catalyst for the local market to move higher [especially] since the Bangko Sentral ng Pilipinas will most probably leave interest rates unchanged.”

The Monetary Board of the central bank is meeting this Thursday to revisit key rates.

The Manila Electric Co. (Meralco) and Philex Mining Corp., which pushed up the index, might remain the focus of investors, however.

Meralco and Philex Mining are being rumored to be the subject of a bidding war by two of the Philippines’ most influential businessmen: San Miguel Corp. President Ramon S. Ang and Metro Pacific Investments Corp. Chairman Manuel V. Pangilinan.

“It seems that the market [would find it hard to go beyond] the 2,900 level [although] it would [be able to] find some support at 2,800. This will most probably be the narrow range that the market would move within this week,” Mr. Yeung said.

Nonetheless, DBP-Daiwa Securities said it welcomes the anticipated correction since the market needs to take a breather after an increase of 17.11% since the start of the second half.

“Should the market correct this week, we recommend that investors buy on the dip since the upward trend of the index has remained intact while the global economy slowly shows signs of improvement,” DBP-Daiwa Securities said.

Entry Credit: http://www.bworldonline.com

What is Ghost Month?

If you’re new to the world of Stock Market, you might be hearing the term “ghost month” by the investors/traders circle. Well, we visited some sites on how they view the Ghost Month as it influences business market for many. Read below:

* This years Ghost month starts on August and ends September.

The Ghost Festival is a traditional Chinese festival and holiday, which is celebrated by Chinese in many countries. In the Chinese calendar (a lunar calendar), the Ghost Festival is on the 14th night of the seventh lunar month.

In Chinese tradition, the seventh month in the Chinese calendar is called the Ghost Month, in which ghosts and spirits, including those of the deceased ancestors, come out from the lower world to visit earth. The Ghost Festival is the climax of a series of the Ghost Month celebrations. Traditionally, ancestor worshiping was an important part of the festivals, with activities including preparing ritualistic offering food, and burning hell money and bags containing cloth to please the visiting ghosts and spirits of the ancestors, as well as other deities. A very solemn festival of ancestor worshiping, the festival nevertheless represents a connection between the ancestors and the descendants, the living and the dead, earth and heaven, as well as body and soul.

So why does this matter to you? Well ghost month is embedded in the chinese tradition where you’re not supposed to spend unnecessarily during the ghost month. this really does happen every lunar ghost month of the year, as some foreign (Asian) funds do not like to make investments at this time. Stock trading is considered an unnecessary expense what this means for traders is less liquidity. If there’s nobody there to really buy up a stock then there’s really no way for stocks to go but sideways or even…. DOWN

Credit to: http://financemanila.net

*Bearish mood to persist as ‘ghost month’ rolls in

TRADING AT the stock market this week would still be influenced by crude prices and the performance of US stocks, analysts said, but consolidation is also expected during this “ghost month.”

“The outlook for the market remains bearish for the long and medium term,” said Jose L. Vistan of AB Capital Securities, Inc. “Short-term view looks cautiously positive as the near-term rally seems to be on shaky legs.”

He added that although last week’s rally might continue this week, the market still lacks the solid fundamentals to make it snap out of its downtrend.

The composite index last week made a surprising gain of 2.8% or 71.49 points to 2,584.21 as local investors focused on crude prices on Friday, ignoring the drop in US stocks.

Credit to: http://www.bworldonline.com

* Ask advice with any old timer in stock market and he’ll tell you to stay away from stocks during the Chinese ghost month. Indeed, the table below shows that stocks tended to perform poorly during this period (12 out of the last 19 years), registering an average loss of 4.1 percent.

PHISIX Performance during the Hungry Ghost Months (1987 – 2005)

*Source: Technistock, Philequity Research

Double whammy

This year is a double whammy of sorts because of the occurrence of a double ghost month. The Chinese lunar calendar (as the name implies) follows the cyclical movement of the moon. Therefore, in the Chinese calendar, a year has a total of 354 days or 11 to 12 days shorter than the solar year. To balance the lunar and solar calendars, a leap lunar month is added every three years. And this year, the leap month occurs in the seventh month with the regular seventh month from July 25 to August 23 and a leap seventh month from August 24 to September 21.

So far, the Philippine Stock Exchange Index (PSEi) is up 3.9 percent since the ghost month started last July 25. Will it stay up or will the jinx of the ghost month finally haunt it in the end? Only time will tell.

Trading simulation

Heeding the old advice of staying out of the stock market during the ghost months should have earned investors more money in their pockets. A simulation below shows that if one peso was invested in the PSEi in 1987 and a strategy of selling before the ghost month and buying it back afterwards was employed, the investment would now be worth P15.10 (or an annual compounded rate of 14.8 percent). Meanwhile, a simple buy-and-hold strategy would have resulted to only P5.01 (or an annual compounded rate of 8.6 percent).

Credit to: http://www.yehey.com/finance

*August is known to be the Chinese ghost month where the perception is that liquidity and the index takes a breather due to the Chinese tradition. However, it has been proven that this phenomenon does not have its usual hold on the market anymore. How will it be this year?

Credit to: http://www.absolutetraders.com

Today’s Stock Buzz- August 14, 2009

Federal Reserve announcement fuels rally

SHARE PRICES closed 0.97% higher yesterday as investors took their cue from overseas markets and an upbeat assessment of the US economy by the Federal Reserve, dealers said.

The benchmark Philippine Stock Exchange index rose by 27.54 points to 2,856.06. The all shares index rose by 0.94%, or 17.02 points, to 1,811.94.

A total of 3.80 billion shares worth P3.12 billion were traded.

Advancers led decliners 71 to 32 while 51 issues closed unchanged.

“It was influenced in a way by markets abroad, specially after the [US Federal Reserve] statement on the economy,” Jose Vistan of AB Capital Securities told Dow Jones Newswires.

“But with the Fed meeting over and most corporate earnings out, there is little in terms of catalyst for the market in the coming days. Expect profit taking.”

The Fed on Wednesday said it would keep its super-low interest rate on hold for a while but gradually end its program of Treasury bond purchases, adding the world’s biggest economy was stabilizing.

Wall Street stocks rallied. The Dow Jones industrial average gained 1.30% or 120.16 points to 9,361.61.

The Standard & Poor’s 500 index climbed by 1.15% or 11.46 points to 1,005.81, while the Nasdaq composite index gained 1.47% or 28.99 points to 1,998.72.

Emmanuel P. Soller of Equitiworld Securities, Inc. however pointed out that the US market serves only as a guide for the local market, even if its rallies usually prompt the same locally.

“The US market’s drops are used by investors to take their profits out. But overall, the local market remains [upbeat],” he said.

Selling pressure builds up, he pointed out, whenever the market nears the 3,000 mark because investors want to book their profits and not because they feel the future looks bleak.

“Investors play safe but this selling pressure will just be temporary unless there is negative news significant enough to make investors pessimistic of the market again,” Mr. Soller said.

Only one of the six subindices tumbled.

The service sector rose by 2.41% or 34.30 points to 1,456.80, while holding firms climbed by 2.16% or 32.44 points to 1,533.84.

The mining and oil sector gained 0.41% or 35.83 points to 8,582.25, while financial stocks advanced by 0.32% or 1.98 points to 606.66.

Property shares added 0.26% or 2.57 points to 977.87.

Industrial companies, however, tumbled by 0.43% or 18.71 points to 4,298.28.

Most blue chips closed higher.

Andrew Tan-led Megaworld Corp. added 2.98% or four centavos to P1.38, while index heavyweight Philippine Long Distance Co. climbed by 2.01% or P50 to P2,530.

Sy-led Banco de Oro Unibank, Inc. gained 1.47% or 50 centavos to P34.50.

Ayala Land, Inc. did not move at P9.40, as well as sister firm Bank of the Philippine Islands, which stayed at P46 apiece.

Manila Electric Co. fell by 2.4% or P6 to P244, while the Metropolitan Bank & Trust Co. tumbled by 1,.29% or 50 centavos to P38.

Maria Arlysa E. Narciso of AB Capital Securities, Inc. disagreed with AB Capital Securities’ Mr. Vistan, saying developments in the foreign markets as well as local earnings reports would continue to be major drivers for the local market.

“Earnings became the highlight of the week and reflected second-quarter impact of the slowdown on economic and business activity. Keep an eye on food-related companies as this could perform well in the coming months,” she said.

Entry Credit: http://www.bworldonline.com

Will Philex Mining (PX) follow Meralco (MER) trend?

Big time stock market veterans might be on the verge of bid war in acquiring shares of ownership with Philex Mining (PX). Be expecting the two big group who are suspected to be responsible on Meralco’s (MER) sudden boom in price value for the past months will continue to do some bidding business!

To quote a post from pinoymoneytalk.com”

In just one week, the price of PX has ballooned by 36%, closing today (August 11) at P10.75.

Look at the recent 3 trading days’ price increase of PX:

* August 7: Closed at P9.00; up 13.9% from previous trading day
* August 10: Closed at P9.90; up 10.0%
* August 11: Closed at P10.75; up 8.6%

Are you interested in buying PX now? Buy at 10.50 or below. Target to sell at 12. But hold to buy at 9 just in case it goes south. Note, PX is quite into the bullish trend and our current market is not yet so BULLISH yet. So how much more if it is? Profit! This is just my view, if you take it, it’s up to you. Happy trading!

President GMA Stock Ownership

This is an excerpt on the news published by www.gmanews.tv regarding President GMA’s undeclared wealth in houses and in stocks.

Few profitable firms

The president, according to SEC records updated as of October 2008, still has business and financial connections in at least five entities: Optima Research & Consultancy Agency, Inc., incorporator as of Sept 15, 1980; L.T.A. Realty Corp., incorporator, as of Sept. 28, 1992; EVA Development Corp., incorporator/board member, as of May 18, 1993; Circulo Pampangueno of Guam, Inc., board member, as of Sept. 29, 1997; and Centrist Democrat International Asia-Pacific, Inc., stockholder, incorporator, board member, as of July 24, 2005.

The First Gentleman, by the SEC’s records, still has business interests and financial connections in at least nine entities: Trans Realty Co., Inc., incorporator, as of Oct. 8, 1980; Raco-Trading Philippines, Inc., incorporator, as of Oct. 9, 1980; L.T.A. Realty Corp., incorporator, as of June 28, 1982; Aviatica Travel & Management Corp., incorporator, as of July 22, 1987; Eva Development Corp., incorporator, board member, as of May 18, 1993; Philippine Blooming Trade and Development Corp., incorporator, as of Sept. 5, 1995; and Pacific Mint International Corp., incorporator, board member, as of May 15, 1997.

The First Gentleman is also connected with three foundations: Ateneo Law Class ’72 Foundation, Inc., board member, as of March 14, 1996; Kaibigan ni Gloria Macapagal Arroyo Foundation, board member, as of May 17, 1999; and First Gentleman Foundation, Inc., incorporator, as of May 28, 2002.

All these firms are not listed in the SALNs that Arroyo filed from 2001 to 2008. But since most are not particularly big or profitable, they could not have served as sources of the First Couple’s additional cash or equity shares.

Could she forget that she owns a couple of shares on the above-mentioned companies? These are all speculations for now until further investigation proves it. Now, do you find investing in stock market as one of the profitable way to earn big (think of dividends)? Let’s start and make also our own way to stock market investment.

Today’s Stock Buzz- August 13, 2009

Prices tumble after US stocks decline anew

SHARE PRICES succumbed to profit taking yesterday with investors taking their cue from Wall Street, which extended its decline, analysts said.

The benchmark Philippine Stock Exchange index lost 1.11% or 32.02 points to 2,828.52, while the all shares index slipped by 1.01% or 18.36 points to 1,794.92.

A total of 4.74 billion shares worth P2.82 billion were traded with net foreign selling summing up to P316 million.

Decliners led advancers 67 to 33, while 65 shares did not move.

“We just tracked the US market. Its almost a hundred-point drop put pressure on our market,” Ivan I. Nario of BDO Securities, Inc. said.

“This could be the start of the long-awaited correction since investors just follow the momentum of [both the overseas and local markets].”

Mr. Nario said the US market is showing some signs of volatility, making investors cautious.

As such, they might sell their positions if they see the prices not going up. After all, Mr. Nario pointed out, the PSEi has broken above the 2,600 and 2,800 levels, which most analysts earlier said would be the best scenarios for equities this year.

“We have been in the overbought level for sometime already, although there is still liquidity in the market that is why there is not much selling pressure,” he said.

Jun B. Calaycay of Accord Capital Equities Corp. said the inability to break above current resistance levels means investors don’t believe share prices would rise so much.

Investors, he said, could be bracing themselves for slumping prices during the “ghost” month of August.

“But despite that, there is no massive sell-off. The market is just trading within a very narrow band and I think those who have bought in are still holding on to their shares, hoping that after the ghost month, the market will resume its upward move since the general economy is already doing well,” he said.

A gloomy forecast for the US banking industry pulled down financial stocks on Tuesday night. The Dow Jones industrial average shed 1.03% or 96.50 points to 9,241.45.

The Standard & Poor’s 500 index slipped by 1.27% or 12.77 points to 994.33, while the Nasdaq composite index tumbled by 1.13% or 22.51 points to 1,969.73.

At home, industrial shares lost 2.32% or 102.54 points to 4,316.99, while holding firms slipped by 1.73% or 26.44 points to 1,501.40.

Mining and oil stocks declined by 1.42% or 123.94 points to 8,546.42, while property shares tumbled by 1.21% or 12.03 points to 975.30.

The service sector dipped by 0.11% or 1.61 points to 1,422.50.

Financial stocks, on the other hand, managed to climb by 0.27% or 1.66 points to 604.68.

Most blue chips closed lower.

Manila Electric Co. declined by 4.76% or P12.50 to P250, while Andrew Tan-led Megaworld Corp. lost 1.47% or two centavos to P1.34.

Sy-led Banco de Oro Unibank, Inc. slipped by 1.44% or 50 centavos to P34, along with Ayala Land, Inc., which fell by 1.05% or 10 centavos to P9.40.

Index heavyweight Philippine Long Distance Telephone Co. lost 0.2% or P5 to P2,480.

Philex Mining Corp. did not move at P10.75, after pushing up share prices the previous day. Likewise, Metropolitan Bank & Trust Co. stayed at P38.50 per share.

The Bank of the Philippine Islands, on the other hand, added 1.09% or 50 centavos to P46.

Entry Credit: http://www.bworldonline.com

Today’s Stock Buzz- August 12, 2009

Profit taking caps gains by mining stocks

SELECT MINING issues managed to push up share prices yesterday despite investors pocketing gains due to lack of positive leads, analysts said.

The benchmark Philippine Stock Exchange index (PSEi) gained 0.34% or 9.96 points to 2,860.54, while the all shares index added 0.32% or 5.82 points to 1,813.28.

A total of 7.93 billion shares worth P5.45 billion were traded. Net foreign selling widened to P323 million.

Advancers led decliners 57 to 43, while 66 shares did not move.

“The upside came from mining-related stocks, led mostly by Philex Mining Corp.,” Eunika B. Maloles of 2TradeAsia.com said.

“The rally, however, was tempered by [profit takers] who took their cue from the [drop in Wall Street stocks on Monday night].”

Doreen Mijares of IGC Securities, Inc. said the PSEi’s gain was minimal since most mining stocks are not part of the index.

The mining and oil sector climbed the most yesterday, surging by 5.8% or 475.89 points to 8,670.36, buoyed mainly by Philex and Lepanto Consolidated Mining Co.

Philex jumped by 8.58% or 85 centavos to P10.75. Lepanto “B” shares, open to all investors, climbed by 6.45% or two centavos to 33 centavos, while “A” shares, exclusive to locals, also added 3.22% or a centavo to 32 centavos.

Both companies recently figured in newspaper headlines. San Miguel Corp. President Ramon S. Ang said he was interested in acquiring a stake in Philex. Lepanto, meanwhile, confirmed rumors that Hong Kong-based First Pacific Ltd. Co. is interested in making an investment in the mining firm.

Other mining-related issues that rallied yesterday included Nihao Mineral Resources International, Inc. that jumped by 16.66% or P1.75 to P12.25 and Abra Mining and Industrial Corp. that rose by 10% or P0.0005 to P0.0055.

But with the market having already reached an overbought level, Ms. Mijares said it is bound to correct, which explains the PSEi did not close higher despite reaching an intraday high of 2,873.53.

“Right now, our outlook for the market is it will continue to correct but it will not fall steeply since those investors who were left behind when the market was rallying will view whatever correction as an opportunity to enter,” Ms. Mijares said.

Profit taking also pulled down Wall Street stocks on Monday. The Dow Jones industrial average lost 0.34% or 32.12 points to 9,337.95.

At home, holding firms climbed by 0.41% or 6.25 points to 1,527.84.

The service sector added 0.35% or 5.10 points to 1,424.11, while industrial shares rose by 0.005% or 0.23 point to 4,419.53.

Financial stocks, on the other hand, dipped by 0.24% or 1.47 points to 603.02, while property shares slipped by 0.13% or 1.37 points to 987.33.

Blue chips closed mixed, with index heavyweight Philippine Long Distance Telephone Co. rising by 0.2% or P5 to P2,485.

Manila Electric Co. did not move at P262.50.

Ayala Land, Inc. was flat at P9.50, along with sister firm the Bank of the Philippine Islands, which stayed at P45.50.

Rival bank Ty-led Metropolitan Bank & Trust Co. remained at P38.50 apiece.

Andrew Tan-led Megaworld, on the other hand, lost 1.44% or two centavos to P1.36, along with Sy-led Banco de Oro Unibank, Inc., which dipped by 1.42% or 50 centavos to P34.50.

Entry Credits: http://www.bworldonline.com

***

Online Stock Trading Steps

Are you interested in how to participate in the stock market in the Philippines but don’t know how to start? Do you have a hard time contacting brokers? Well, you could always do stock trading and investing online! Let me give you some baby steps to the local Stock Market i.e., the Philippine Stocks Exchange.

How to Start In Online Stock Trading:

1. 1. Open an online account thru CITISEC or BPI Trade. In my case, I have BPI Trade but it’s good to have both. Simply fill-up the online registration form (BPI Trade) and PRINT it after. Please double check your information that they are correct before printing.
   2. The instructions are stated in their site but for your convenience, you have to photocopy 2 Valid IDs (front and back). Example: GSIS, SSS, Passport, Voter’s ID, Driver’s License, Company ID, PRC ID, etc.
   3. You must have an existing BPI Account whether ATM/Savings. If you don’t have yet, open one at your nearest BPI bank in your area.
   4. Submit the photocopied IDs and the printed BPI TRADE registration form to the BPI branch where you opened your ATM/Savings account and tell the Customer Rep that you want to submit the requirements for BPI TRADE (online stock).
   5. You will have to wait for about 5 to 7 business days for your BPI Trade account processing. They will also send you an email on the progress of your account processing within the duration. So, please check you email regularly.

Voila! That’s how you get started in online stock trading thru BPI Trade.

Now, you have the account set-up already, what to do next?

1. Once you have the username and password initially given to you by BPI Trade, you will be given a simple instruction to change your password but not your username. So please do remember the username and password when you registered to avoid such mess.
2. First time to view the BPI Trade page? No worry, there’s an online tour HERE.
3. Let me elaborate the tabs:

• * Market Info- it displays the real-time market condition and that you could also refer it to PSE.
  * Stock Info- it is where you check the current real-time information of the stock of your choice. Just fill-in the stock symbol in the tab. It will display the current price and all necessary information.
  * Quote Page- it displays your ten favorite stocks with their real-time information.
  * Time & Sales- it displays the real time buying and selling transactions of your stock choice.
  * Most Active- it displays the most active stocks in the Philippine Stock Exchange.
  * Top Gain/Lose- it displays the top gainer/loser stocks real-time.

4. At the side tab:

* Stocks (under trading)- this is where you buy and sell a particular stock of your choice. Just fill in the stock symbol, the number of shares you want to buy or sell (if you have bought some shares already) and of course the price you are willing to buy or sell.

Note: You have to make sure to put funds to your BPI trade account before you could make any transaction.

* You could deposit your money for your BPI Trade account thru over-the-counter to any BPI Branch or you may do an online transfer from your online BPI ATM/Savings account direct to your BPI Trade account for convenience.
* In case you sold your stocks, proceeds/sales will be credited to your BPI Trade account but you have to transfer it to your BPI ATM/Savings account thru online transfer only so you could withdraw it. You can’t withdraw the funds in your BPI Trade account. It has to be transferred.

Hope this helps!!! Good Luck to your online stock trading experience!

Meralco’s Rise and fall

Rise and fall of Meralco: Your questions answered
PHILEQUITY CORNER By Valentino Sy (The Philippine Star) Updated August 03, 2009 12:00 AM

We have received many queries on the recent price action of Meralco. Many are still befuddled on the steep rise and the equally sharp fall of its stock price. Last week, market watchers have been asking why Meralco shares have gone up to a closing price of P205 per share. They commented that at P205 per share it was already overpriced.

However, after Meralco reached P302.50 per share this week, the same people are questioning why it dropped when in fact it closed at P229 per share, which is 12 percent higher than the previous week’s close.

Because of the many queries of our readers and investors, we are changing the format of our column today to a question and answer (Q&A) type.

1) Why did Meralco’s share price zoom to astronomical levels these past few weeks?

In our article Turf Wars (see July 13, 2009 issue of The Philippine Star), we said that Meralco’s price action continues to defy gravity because the battle for control, given the limited free float circulating, is exerting upward pressure on the share price.

We mentioned the possible scenarios:

a) That the PLDT Group or the SMC group may be buying in the market to get a majority stake,

b) That fund managers sympathetic to either side may be accumulating

c) That a risk arbitrageur may be gobbling up the free float with the intention of selling the shares to the highest bidder

d) That maybe all of them are doing the buying at the same time.

Note that buying in the market is less costly than for one party to buy the other out which would trigger a tender offer for all the shares.

2) Why did it reach a staggering level of P302.50 per share?

It appeared that the race to own 50-percent stake + one share was decided by “photo finish”. Therefore that last one or two percent — which matter the most — commanded a huge premium. Buying two percent of the company at P300 per share to gain control is actually cheap.

Morover, many fail to realize that the bulk of the stakes of PLDT Group and SMC Group are priced at P90 per share (in SMC’s case it is even less because it is payable in three years).Thus, even if the winning bidder paid P300 per share for the last two percent, the average cost would just be a little over P90 per share.

3) Why did the Meralco drop sharply after reaching P300 per share?

To the experienced eye or seasoned investors, the block of shares that was crossed at P300 per share last Wednesday was a clear signal that the game was over. It was clear at that instance that one party sold and that the other party bought the deciding block.

It did not really matter which party won. It was apparent that when the fight for control was over, the demand for the shares and the buying frenzy would no longer continue.

4) Why is that block of shares traded on Wednesday a game-changer?

It was a game-changer because that block of shares represents nearly two percent of Meralco. Therefore it meant minus two percent for one side and plus two percent for the other side – a swing of around four percent.

5) So, who eventually got control of Meralco?

A quick look at the PSE quotation report last Wednesday showed a net foreign buying of P2.03 billion. A foreign broker known to be used by the PLDT Group and foreign funds sympathetic to PLDT crossed 6.7 million shares last Wednesday. Meanwhile, a local broker which represented one of the local funds sympathetic to the SMC Group crossed six million shares.

Apparently the funds that are allies to SMC Group flipped and sold to the highest bidder. Obviously, the PLDT Group now owns the majority of Meralco.

6) Why is getting control of Meralco important for PLDT?

The PLDT group sees real synergies between Meralco and PLDT. The company mentioned eight specific areas where they can work together, namely: powerline broadband, fiber optic backbone network, electric power poles, easements and rights of way, prepaid electricity service, business offices, ICT or data center, bill statement printing & enveloping and access to subscriber base.

Moreover, losing Meralco at this point, when it has already invested billions of pesos, would be disastrous for PLDT. In fact, PLDT’s share price has lagged the market during the battle for control of Meralco but when it was clear that PLDT maintained control, the stock price went up.

7) What do we do now with Meralco?

For those who have a short-term perspective, especially the punters, the answer was clear. If the fight for control is over, they have no choice but to sell.

For those with a long-term view, PLDT Group’s entry in Meralco brings many opportunities. Manny Pangilinan’s track record of turning companies around, cost-cutting and creating synergies to optimise profits and enhance shareholder value is definitely a positive for the stock. MVP has proven this in PLDT with its shareholder value and stock price steadily increasing since he has taken over.

While Meralco’s stock price has gone up too fast too soon, the company has a strong franchise, a good business model and sound fundamentals.

Is the turf war over?

As far as the fight for control of Meralco is concerned, the game is over. But in other battle turfs, the war would probably continue as both parties are involved in telecommunications, infrastructure and other businesses in the Philippines.

Lessons learned

The meteoric rise in the share price of Meralco and the sharp drop afterwards provide valuable lessons for investors.

1) One important lesson is that you should do your own research rather than following without thought what your brokers are doing. In Meralco’s case, most brokerage houses had recommended a SELL on Meralco when it first reached P90 per share. Their recommendation may have been based on fundamentals, not considering the battle for control.

But if you did your homework and realized that there was a battle for control and limited free float circulating, you would have known that the rich valuations were justified.

In the same manner, when the race to get majority is over, you should recognize that valuations will revert back to fundamentals.

2) Another lesson is that you should follow strictly your investment profile. If you are a short-term trader, you should be alert and nimble because while profit potential is high, volatility at the turn will be wild.

If you are a retail punter, it is important to do your homework rather than following blindly what bigger brokers or investors are doing. In this case, the block sale of Meralco may have triggered an immediate change in view from these investors. Instead of being buyers, they may have become sellers.

Finally, if you are a long-term investor, you should buy when the price is being offered at a bargain or as Warren Buffet and Benjamin Graham put it “you should buy when the price of a stock offers a huge margin of safety.”

Rule of 72

Do you want to know how Compound Interest works for your money? Do you want to know how to double your money for a period of time say in years? Do you know about the RULE of 72? Do you want money work for you instead you working hard for the money? Do you want to get wealthy? Knowing the secrets of the wealthy is in your hand! Please read below:

Trivia:

“Albert Einstein called compound interest as the 8th wonder of the world and mankind’s greatest invention, because it is the mightiest force ever unleashed for the amassing of wealth”

How is Rule of 72 computed?

- It is dividing the value of 72 by the interest rate per period to estimate the number of years it takes for your money to double.

Example: If you have Php 100. When will this become Php 200?

Answer: W e have to apply the Rule of 72 and in depends on the interest rate where you put your money at.

* Scenario 1: Bank- it will give your money 1% interest rate per annum. But consider taxes, it might give you less than 1%, say .66% perhaps. This is on regular savings. You may get 4% interest rate per annum if you put your money in time deposit in the bank. Computation: 72/1=72. It means, it will take 72 years for your Php 100 to become Php 200.

* Scenario 2: Bonds- these are certificate of indebtedness issued by the government or any company who wish to borrow money from you with the promise to pay you out after a certain period (say 3 years) with a guaranteed interest rate. This is SECURED and NON-RISKY investment of your money. Most of them will give you 4% to 6% interest only per annum. Way better than 1% right? Let’s take at 4%. Computation: 72/4=18. It means, it will take 18 years for your Php 100 to become Php 200.

* Scenario 3: Stocks/Equity- these are shares or certificate of ownership issued by companies or corporations if you acquire a portion of their outstanding shares offered to the public. This is a risky investment but it may give you more than 12% or let’s say 100% or 200% or more of your money! But taking the risk is ok if you know how to manage your investments. Let’s take 24% rate of return. Computation: 72/24=3. It means, it will take 3 years for your Php 100 to become Php 200.

* Scenario 4: Mutual funds- it allows many investors (individuals, banks, companies, etc.) to pool their money and Professional Money managers will invest it in a diversified portfolio of securities (bond and/or stocks). It is recommended for NEWBIES who wants to try the stock market. It is “quite” non-risky or may be risky. So, it’s important to know what mutual fund to invest in. It may give you like 8% or more. It depends on how your Professional Money managers invested your money to give you the highest return possible. Let’s take 8%. Computation: 72/8=9. It means, it will take 9 years for your Php 100 to become Php 200.

There you go, that’s the power of Rule of 72. It is easy to compute. Now, you know already where to put your money to double it! It’s just choosing the options above, if you have questions or suggestions, you may leave a reply below or go to our FORUMS or chat with ME.