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RED is not the color in the PSE on Valentine's Day

The day's market - February 14, 2007
The Philippine stock market resumed its bullish ways after the 3,200 support level held in the previous days' correction and consolidation.

The PSEi zoomed up by 67.03 (+2.07%) to end at 3300.94. It is a new 10 year-high close.

Buying was across-the-board as all sectors were up. The rise was led by the Property (+3.12%), Services (+2.70%) and Financial (+2.15%) sectors.
Trading was brisk as buyers went back into the market in a big way and pushed prices higher. Total volume traded reached PhP 5 billion.

Gainers swamped losers 83 to 48.

The rise in the market was broad based and not confined to the blue chip and index issues. Punters were active in the market as the smaller cap issues also continued its rise from yesterday.

Yesterday's secondliners that were tracked also continued to rise. The closing prices today were: MAC PhP 2.75 (from PhP 2.32 previously), ABA PhP 0.013, ABAB PhP 0.014 and BEL PhP 1.50 (after reaching a days' high of PhP 1.62).

Momentum is seen to carry the market to higher grounds as it breaks through the 3,300 level. But at current levels, it may be prone to sudden bouts of profit taking esp on stocks that are at overbought levels.

Stock Movement on Corporate news - February 13 ,2007 (PM)

The day's market - Februay 13, 2007
The stocks that were tracked for their price movement were the ones that came out with news in the newspapers this morning.


time------------PSEi-------AC------ALI------GLO----BPI----ABA/ABAB----MAC----BEL

previous--------3243.16----625---16.25-----1355-----70----0.01/0.012-----2.16----1.30
open up7.47----3241.60----630----16.50-------------70----0.012/0.013----2.22---1.36
9:36 up2.89----3237.05-----625----16.50---1360---69.5---0.012/0.014----2.24---1.40
9:43 dn1.77----3232.39-----625----16.50---1360---69.5---0.012/0.013---2.28---1.38
9:56 dn3.13----3231.03-----625----16.50---1360---69.5---0.012/0.013---2.28---1.38
10:02 dn5.26---3228.90-----625----16.50---1375---69.5--0.012/0.013---2.26----1.38
10:38 dn6.66---3227.50----625-----16.50---1375----70---0.012/0.013---2.26----1.40
10:42 dn9.91---3224.25-----625----16.50---1375----70---0.012/0.013----2.26---1.40
10:47 dn3.16---3231.00----625-----16.50---1375----70---0.012/0.013----2.26----1.44
11:10 dn8.07---3226.09----615-----16.25----1375---69.5---0.012/0.013---2.32----1.42
11:22 dn2.92---3231.24-----620----16.50----1375---69.5---0.012/0.013----2.32---1.42
11:41dn 5.21---3228.95-----620----16.50----1370---69.5---0.012/0.013---2.30---1.44
11:48dn 8.85---3225.31----620-----16.25----1375---69.5---0.012/0.013----2.30---1.46
11:50dn2.52---3231.64-----615-----16.50----1375----69-----0.012/0.013---2.30---1.46
12:00dn0.25---3233.91----620----16.50----1380---69.5---0.012/0.013---2.32----1.48
Market close.

The market just consolidated and moved within a narrower range after the big swings the previous trading days. The index even closed almost unchanged.
Immediate support and resistance is at 3,200 - 3,250.

The secondliners and smaller cap stocks were the issues actively traded for the day. Even with the market flat, gainers outnumbered decliners 71 to 48.

As also seen from the stocks tracked today, it is the secondliners who were seen reacting positively to news reports. (ABA 0.01 to 0.012 / ABA 0.012 to0.013; MAC 2.16 to 2.32 and BEL 1.30 to 1.48).

Corporate news - February 13, 2007 (AM)

Ayala Corporation
Ayala Corporation (AC) earnings up 49%. In its unaudited consolidated net income for 2006 rose from the Php 8.2 billion in 2005 to a record PhP 12.2 billion in 2006, due to growth of its operating units, lower interes expense and gains from asset sales.
Last trading price: PhP 625.00

Subsidiaries:
Ayala Land Inc. (ALI) consolidated profits up PhP 3.9 billion in 2006 up 7% from last year. Consolidated revenues up 20%.
Last trading price: PhP 16.25

Bank of the Philippine Islands (BPI) net income of Php 9 billion, 8% higher than 2005's level. Revenues grew by 9%.
Last trading price: PhP 70.00

Globe Telecom (GLO) consilidated net income of about pHp 12 billion, 14% higher than the previous year. (Wireless subscriber base grew 26% and reached 15.7 billion at year end.
Last trading price: PhP 1,355.00



Abacus Consolidated Resources & Holdings Inc . (ABA)
In a statement, Abacus Consolidated Resources & Holdings Inc., said that its 96.4% owned unit, Philippine Regional Investment Development Corp., has signed a MOA with Solar Resources Inc. ( a unit of of broadcast and cable television company Solar Entertainment Corp.) to develop a 120-hectare property in Batangas, into a high-end residential complex.
The Abacus unit will contribute the land, while Solar Resources will provide facilities.
Construction and development is expected within four years from commencement.
Last trading price: ABA PhP 0.01 / ABAB PhP 0.012

reference / source: Manila Bulletin Business Pages; February 13, 2007


MacroAsia ( MAC)
Jinchuan Group Ltd the largest producer of nickel and cobalt in China is conducting due diligence in MacroAia's mine site in Brooke's Point Palawan.
Last year, MacroAsia disclosed it secured a Mineral Production Sharing Agreement (MPSA) from the Mines and Geosciences Bureau for mining operations in the 1,113.98 ha. of land in Brooke's point in Palawan
Last trading price: PhP 2.16


Belle Corporation (BEL)
Lottery systems supplier Pacific Online Systems Corp. ( a unit of Belle Corp.) has filed registration documents with the SEC.
The Company is set to offer 340 mn woth of shares through an IPO next month at a range of PhP 8.50 - PHp 9.30. Total number of shares to be offered is 39.8 million.
The company, 43% owned by Belle Corp., 37% owned by Abacus Global Technovisions Inc. and 20% owned by Tanjong Public Ltd. Co, a Malaysian holding firm, will be listed in the first board of the Philippine Stock Exchange.
Last trading price: PhP 1.30

reference / source: BusinessWorld, Corporate News Pages; February 13, 2007 (Tuesday)


With the news that came out in the morning dailies/ papers, we will try to see if the news that came out today will affect trading and stock prices.
Investors may buy into the stocks on a knee jerk reaction. In a bullish market where the short term trading has been on a roller coaster ride with a wide trading band, corporate news may provide direction. If the news has already been factored in, (especially in stocks which has already experienced a run up before today), a sell on news strategy may be adapted by some investors to take profit.




Start of Campaign period
Today marks the official start of another political exercise. It would be noteworthy to track of the events leading to the coming elections (and beyond) and track stock market movements in relation to them.

Last year, we wrote a paper taking note of events in the 2nd and 3rd quarter of 2005 (Jueteng gate, Garci tapes, Hyatt 10, E-VAT) and tracked the stock market movement for the same period. By January 2006, the market was testing the 2176 level which was then a year high. We will try to see if we can post it in our blog.

Blue chips and the PSEi

US Market and PLDT ADRs

The US market was down on Friday (Feb 9, 2007) by 56.80 points. The Dow Jones Industrial Average (DJIA) closed at 12580.83.

The PLDT ADRs (American Depository Receipts) was down by $0.15 to close at $51.24.
The Dollar traded this morning (9:39 am) at Php 48.310.

Conversion: $51.24 X PhP 48.310 / $1.00 = PhP 2475.00


The day's market - February 12, 2007

Philippine Long Distance Corp or PLDT (trading symbol TEL) closed at PhP 2550/ share on Friday (feb 12, 2007) at the PSE.
With the PLDT ADRs trading at only PhP 2475 in the US markets; it was seen that at the last trade that PLDT was overpriced and soon enough fell to close the gap.

For the purpose of illustrating the movement of the Philippine Stock Exhange Index (PSEi) against blue chip issues, aside from PLDT; the price movement of Ayala Corporation (AC) and Meralco B shares (MERB) were monitored during the trading day.

-------------------------PSEi--------TEL (PLDT)-----AC-------MERB
Feb 12 (friday) --------3245.81------2550-----------635---------75.50


9:31 am---down 2.29----3243.52--------2550------------635---------75.00
9:35------down 4.53----3241.28--------2550------------630---------74.50
9:43------down 18.87---3226.94--------2525------------615---------74.00
9:47------down 21.22---3224.59--------2495------------615---------74.00
9:48------down 29.55---3216.26--------2495------------615---------73.50

With PLDT being weighed heavily in the index, the PSEi is obviously influenced by its trading price and movement in other index heavyweights.

9:50------down 36.22---3209.59--------2480------------615---------73.50
9:52------down 32.58---3213.23--------2495------------615---------73.50

Momentum now carried the market lower as selling spread across the market.
PLDT, AC and MERB has hit the days' bottom.

9:54-----down 37.85---3207.96--------2495-------------615--------73.50
9:57-----down 39.57---3206.24--------2495-------------615--------73.50
10:02----down 40.62---3205.19--------2495-------------615--------73.50

As the market neared the 3,200 support, bargain hunting once again became evident. The rally is led also by the blue chip issues

10:11----down 36.42---3209.39-------2500--------------620--------74.00
10:13----down 35.12---3210.69-------2500--------------625--------74.00
10:16----down 33.74---3212.07-------2500--------------625--------74.50
10:34----down 34.73---3211.08-------2505--------------620--------74.50
10:40----down 33.54---3212.27-------2505--------------620--------75.50
10:50----down 28.86---3216.95-------2510--------------620--------75.50
10:51----down 24.66---3221.25-------2515--------------620--------75.50
11:07----down 30.40---3215.41-------2515--------------620--------75.50
11:10----down 26.38---3219.43-------2515--------------620--------75.50
11:22----down 25.42---3220.39-------2515--------------615--------76.00
11:26----down 21.72---3224.09-------2515--------------620--------76.50
11:31----down 19.87---3225.94-------2520--------------620--------76.50
11:40----down 15.95---3229.86-------2525--------------620--------76.50
11:43----down 13.36---3232.45-------2520--------------620--------78.00
11:54----down 9.99----3235.82-------2525--------------625--------77.50
12:00----down 11.65---3234.16-------2520--------------625--------78.50

Market closed.

The market again showed its resiliency as it recovered most of its losses.

*****If today, one was lucky enough to buy on these dips and sell on recovery, (see MERB; low 73.50 and high 78.50) then you have just made money by daytrading.

Philippine Exports, FDIs and "Hot Money"

Exports
The 2006 Philippine export growth of 14% to $47.03 billion outperformed the government's growth target of 10%
This is despite the decline in exports by in December (the first drop in 13 months), as the strong peso made the country's exports more expensive for foreign buyers. In December, exports fell 3.8% year-on-year to $3.68 billion after a 10.7% gain in November.


Foreign Direct Investment (FDI)
Investor enthusiasm over the country's improving economy has started to translate into significant grwth in Foreign Direct Investment. For the first 11 months of 2006, FDIs reached $ 2 billion with November inflows reaching $ 46 million. This is the highest since 2001.
Investor confidence was boosted by the solid macroeconomic fundamentals particularly the improvement in the government's fiscal position and the steady decline in inflation rate.


"Hot Money"
Foreign investments in Philippine stocks, bonds and other financial instrumens stood at $252.52 million in January, more than reversing an outflow of $115.47 million a year earlier.

Net inflows for the whole of 2006 went up by 24% and reached $2.602 billion, about $498.4 million more than the total inflow in 2005 which was at $2.103 billion.

According to BSP Governor Amando Tetangco, the development reflected continuing bullish sentiment on the country's economic prospects following evidence of sustained improvement in economic and financial indicators.
He cited the continued slowdown in inflation to 4.3% in December, a better-than-expected balance of payments surplus of $3.77 billion in 2006 and the reduction in the fiscal deficit to $62.2 billion in 2006.


reference / source: The Philippine Star; Business Pages February 10, 2007 - Saturday

The Philippine Stockmarket Rebounds - February 09, 2007

The Philippine stockmarket bounces back after the past day's downtrend. It easily hurdled the 3,200 level as bargain hunters came back in a big way. The economic good news that have been filtering the past week had investors just waiting on the sidelines for a signal to buy in the market.


The day's market February 9 ,2007

PSEi previous close: 3196.08 (Feb 08)


time-----------up / down------------PSEi-----------PhP vs $----------PhP vs $ volume

9:31----------down 2.99-----------3193.09
9:45----------up 28.76 -----------3224.84----------48.347------------Php 49.50 mn
9:47----------up 32.97------------3229.05
9:56----------up 49.60------------3245.68
9:58----------up 52.71------------3248.79
10:00--------up 54.76------------3250.84
10:01--------up 57.60------------3253.68
10:11---------up 55.16-----------3251.24
10:16----------up 57.00---------3253.08
10:19-----------------------------------------------48.340-----------------87.50mn
10:23----------up57.83----------3253.91
10:34----------up 59.39--------3255.47
10:48----------up 59.29---------3255.37
10:56----------up 59.29---------3255.37
10:59-----------------------------------------------48.313----------------189.87mn
11:00----------up 59.91---------3255.99
11:02----------up 61.63---------3257.71

the day's high

11:08----------up60.32---------3256.40
11:10----------up59.04----------3255.12
11:21----------up53.05----------3249.13
11:31----------up47.98-----------3244.06
11:36----------up44.24----------3240.32
11:42----------up46.96---------3243.04
11:45----------up 49.28---------3245.36
11:50----------up45.77---------3241.85
11:56----------up43.71---------3239.79
11:59----------up 50.11--------3246.19
12:00---------up49.73----------3245.81 close

The rebound was led by PLDT as it had corrected from a high of Php 2820 which was attained on January 25, 2007. It gained PhP 90 for the day to closse at PhP 2550 from PhP 2470 previously.

There is liquidity in the market system and fundamentals are intact. As mentioned in the previous days'; deep corrections may be seen as buying windows.

Gross International Reserves (GIR) at record high

Gross International Reserves

The country's gross international reserves hit $23.76 bn in January, rising by $ 790 mn from December and $ 2 bn more than the recorded level for the same period last year.
This end-January GIR level could cover about 4.6 months of imports of goods and payments of reserves and income.


Peso vs $

The peso also hit its highest level in nearly six years. It went to a high of PhP 48.355 to the dollar before closing at PhP 48.365

source / reference : The Philippine Star; Business pages February 8, 2007



The day's market - February 8 , 2007

The PSEi closed previously at 3232.39 and was seen to consolidate as a correction has set in. The market tried to bounce back from the previous days' losses very early in the trading day and was even up by about 5 points at one point. Selling momentum built up from the previous days immediately dragged the market lower towards the 3200 support level.

time-------------up / down-------------PSEi------------PhP vs $----------PhP volume

9:39----------------------------------------------------------48.433-----------84.00mn
10:12---------------------------------------------------------48.433----------138.00mn
10:45------------down 24.81------------3207.58
11:15------------down 21.55------------3210.84
11:19----------------------------------------------------------48.437----------287.00mn

peso slightly weaker against the dollar

11:20------------down 25.80------------3206.59
11:32------------down 34.60------------3197.79

market broke down the 3200 support and drop accelerates

11:43------------down 40.98-----------3191.41

the days low was at 3190.74. the market tries to stay near the 3,200 level

11:58-------------down 38.34----------3194.15
12:00------------down 36.31-----------3196.08

The market has gone down about a hundred points in just three days (on Feb 6 - tuesday, it hit an intraday high of 3,308.58.). The support now is at 3,155 to 3170 level and seems to be the likely target.

But as the market ended just a tad below the 3200 level, it may try to hover around and try to attempt to rebound above. Bargain hunters may step in as they see some picks. Also, activity is seen in the second and third liners and this will keep investors buoyant

The drop in the market is still a healthy correction and these dips can be seen as buying windows. The PSEi right now needs to retrace after going up nearly 10% year since end-December 2006.

January 2007 Inflation Figure

Inflation

Inflation was lower in January, at just 3.9%. It was the lowest in more than three years, from 4.3% in December.

" The 3.9% inflation rate further confirms the benign inflation outlook. It provides additional flexibility for monetary policy. This will further support greater economic resilience and help advance financial reforms and strengthen market confidence"
-Bangko Sentral ng pilipinas Governor Amando Tetangco Jr. -

reference / source: BusinessMirror February 7, 2007


Peso vs the Dollar

The peso rose to a six year high agains the dollar as indications of a benign inflation environment for the year further buoyed market sentiment on the country's economic fundamentals.
It closed at PhP 48.505, a steep 16 1/2 centavo climb from Monday.

reference / source: BusinessWorld February 7, 2007



The days' market February 7, 2007

Today at the Philippine Stock Exchange
PSEi Previous close: 3271.97 (February 6, 2007)

time -----------up / down ----------PSEi ----------Peso vs $ ---------Peso vs $ volume

9:31 am -------up 12.49---------- 3284.46
9:37---------------------------------------------------48.43 -----------103.50 mn
9:38---------- up 2.89----------- 3274.86

The Philippine stock market reacted positively on a knee-jerk reaction on the strength of the peso and better than expected inflation figures.

9:43----------- down 1.62--------- 3270.35
9:54 -----------down 10.78 ---------3261.19
9:58 -----------down 6.67---------- 3265.30
10:10---------- down 12.99 ---------3258.98
10:13 -----------down 14.71 ---------3257.26
10:15 -----------down 15.25--------- 3256.72---------- 48.406----------- 254.00 mn
10:18 -----------down 18.54--------- 3253.43
10:23----------- down 26.30--------- 3245.67
10:26----------- down 28.63--------- 3243.34
10:30----------- down 29.15--------- 3242.82
10:33----------- down 30.93---------- 3241.04
10:35----------- down 32.70---------- 3239.27 ---------48.404----------- 287.00mn
10:42----------- down 32.16----------- 3239.81
10:45-----------down 35.68 ---------- 3236.29
10:54----------- down 40.52----------- 3231.45

the market seems to have bottomed out for the day and tries to bounce back

10:55----------- down 36.81----------- 3235.16
10:57----------- down 34.04----------- 3237.93
10:59----------- down 33.30----------- 3238.77
11:01 -----------down 32.83----------- 3239.14
11:08----------- down 31.42------------ 3240.55
11:15------------ down 30.97----------- 3241.00 -----------48.399---------- 353.00mn
11:20------------ down 29.52----------- 3242.45
11:35------------------------------------------------------- 48.398 -----------361.00mn
11:42------------ down 26.91------------ 3245.06
11:46------------ down 26.61------------ 3245.36

the market tried to rally above the 3250 level, its previous support but selling in the final minutes had it closing near its day's low

11:54 ------------down 29.76------------ 3242.21
11:58 ------------down 30.95------------ 3241.33
11:59 -------------------------------------------------------48.373----------- 471.00mn
12:00 ------------down 39.58------------ 3232.39
Market close



reference: Maktrade system


The market failed to stay above the 3250 support. Correction may continue on momentum and the new support is pegged at 3200-3220.


Considering the good economic figures that came out, the decline is still a healthy one and may be taken as opportunities for bargain hunting.

Trade in the next two days may be lackluster with a downward bias ahead of the weekend and the coming chinese new years celebration. A rebound may not be discounted as buying is seen to come in near support levels.

New Record Low for 91-day T-bill rate

Treasury Bill Auctions

Yesterday, the 91-day Treasury bill rate dropped to 3.008% a new record low. This was from the 3.171% recorded at the January 22 auction.

Treasury officials increased the award as it was reported that the T-bill sale was seven times oversubscribed amid liiquidity and abscence of instruments where the market can excess funds.

* the 91 day t-bill is used by banks as a benchmark for loan rates

182 -day t-bill 3.473% from 3.665%
364 -day t-bill 3.998% from 4.218%

Total awards amounted to PhP 5.6bn or PhP 1.6bn over the Php 4 bn offered.

Reference : The Philippine Star; Business pages



The day's market - February 6, 2007

The Philippine stock market started strong and broke above the 3,300 level early on the trading day. The PSEi was up by about 27 points at one time and reached an intraday high of 3,282.02.

Selling pressure however was felt by midtrading and prompted a correction. The market ended lower by 9.93 points (-0.30%) to close the day at 3,271.97. This reversal could signal a minor pullback after the 6th straight session of advancing.

The market is likely to consolidate between the 3,250 - 3,300 level as it needs a stronger base before advancing further to try to test the all time high level at around 3,447 which was achieved on February 1997.

* FLI resumed trading after completion of its secondary offering at PhP 1.605. It closed for the day at PhP 1.82 after opening at Php 1.80 reaching a high of PhP 1.92

The stockmarket reacts positively on the news

The days' market: February 2, 2007
The stockmarket continued its run up as the news of the dwindling budgetary deficit perked up investors. Philippine Stock Exhange Index (PSEi) ended the day higher by 23.92 pts (+0.74%) to end at 3269.18.

For the week, all sectors advanced and the best performer was the Property sector which ended higher by 8.11% in the past five trading days.



Other important data for investors:

Gold price $652.65 / ounce as of February 1, 2007

T-bill 91-day (weekly auction date 22 january 07)
3.171% down from 3.795% previously


MART1 RATES
February 1, 2007 ( source: BusinessWorld Friday-Saturday. February 2-3, 2007)


Benchmark Interest Mart 1
Rates 2/1/07

1 month 3.7393
3 months 3.9975
6months 4.7839
1 year 5.0179
3 years 5.7250
5 years 6.1154
10 years 6.9125

We see how news and economic data affect the equities market (stockmarket) and we can learn how to use this information in our investing decisions.

News that matters for investment decisions.

Gross Domestic Product ( GDP )

The Philippine GDP grew by 5.4% in 2006. The economy got a boost from strong exports and dollar inflows from overseas workers. It just missed the 5.5% target of the government because of the series of typhoons that hit the country in the last quarter. The figure however is still better than the 5.0% growth of 2005

The contry's gross national product (GNP) also rose 6.2 %, as compared with 5.6% in 2005. GNP is GDP plus income earned abroad.


Budget Deficit

The Philippine government just announced that its budget deficit for 2006 stood at P62.2 billion ($1.27 billion) or 1.04 % of gross domestic product. According to the release, this is the third year in a row that it had outperformed annual target.

The figure was less than half of the P125 billion expected for the period.

The expected budget deficit for 2007 is P63 billion and by 2008 it is targetted to end nearly a decade of fiscal shortfalls in 2008.

* Source : Inquirer.net


One of the musts in investing is knowing the business condition andtherefore the investment climate. In this case the state of the Philippine economy is what matters first. Keep reading the business pages and watch our for the economic news that comes out. This will give us an idea how investment may perform and will guide us in our making decisions.

Since these news just came out, we start with them because in investing, it is important for the right information to get to the right people at the right time.

A positive and increasing GDP signifies growth in the economy. Generally, investing is better in a growing economy. The GDP growth posted was a modest one but signals an improving business climate. A target growth of at least 6.1 to 6.7% for 2007 was set.

If the government operates on a budget deficit, it needs to source fund to plug these shortfalls. They have to borrow abroad and thereby increase our foreign debt. They also crowd out local borrowers for available funds. These lead to to an increae in interest rates. Higher rates means higher costs of doing business.

Currently, local interest rates are low enough ( T-bills are just around 3.5% and three year bonds just above 5.%) to spur businesses to expand, banks to lend, buyers to purchase real estate and properties and excess liquid funds to buy in the stock market (now near its 10 year highs - PSEi closed at 3245.26 today).