Archive for March 2012
Leveling Up
In Mr. Hans Sicat’s presentation last March 15 at the Bloomberg LP, he mentioned that the PSE’s strategic agenda can be summed up in two words: LEVEL UP, i.e.,
- List more companies and securities.
- Expand and educate the investor base.
- Value and enforce corporate governance standards.
- Enhance shareholder value.
- Launch new products and services.
- Upgrade market infrastructure and human resources.
- Partner with government and other stakeholders.
Besides, this year marks the final year of implementation of these agenda. He also highlighted some milestones that were achieved in 2011: Rule Amendments, Market Education Initiatives, Improved Governance, and of course, Increased Trading Activity. Awesome job, PSE!
E with Mr. Hans Sicat, President and CEO of the Philippine Stock Exchange, Inc. (PSE) at the PSE-Bloomberg hosted road show in SG.
I believe that it is also important to highlight that the average daily trading has increased by as much as 15.5% in 2011 (from 2010). Moreover, I read a news clip on the PSE (source: Technistock) that says “higher trading activity and record capital raising levels boosted the revenues of the Philippine Stock Exchange (PSE) in 2011 by nearly, 10 percent.” With these information, I am thinking that the PSE (stock) might be worth a look. 
Anyway, the PSEi closed at 5,102.24 today, down by around 0.48%. I have been expecting this and I believe that this is just a healthy consolidation, nothing to worry about. When I was at the PSE-Bloomberg road show, I was very much convinced that every one in the forum agrees on one thing: that the growth of the Philippine economy is sustainable. The panelists in the open forum were:
- Lian Chia Liang, Head of Investment Management, Asia of Western Asset Management
- David G. Fernandez, Managing Director of JPMorgan Chase & Co
- Edward Lee Wee Kok, Regional Head of Research, SEA of Standard Chartered Bank
- Tamara Henderson, PhD Economist in Bloomberg L.P.
Err.. Some details. My portfolio still has not changed, with ORE as its top gainer. I plan to diversify soon though because I’m fully invested in the Mining and Oil sector alone! I mean, with the PSE’s very bright future ahead, I suppose that it’s time for me to reconsider some blue chips. Now, in terms of fundamentals and the amount of money I’m playing with, I have my eyes set on MPI and DMC and PGOLD. A friend also pointed out that PCOR has been lagging behind. True. It does have a substantial potential at its current level.
Anyway, everything within my radar looks so darn attractive! I’m just painstakingly waiting for them to reach comfortable entry levels. I need to research some more though — fundamentals first before the technicals.
Eye on the Philippines
It was such a privilege to be invited by the Philippine Stocks Exchange, Inc. (PSE) to a seminar they co-hosted with Bloomberg LP here in Singapore.
The road show on Thursday was especially exciting and enlightening for me since it was my first time to be in a company of big investors, businessmen, finance people, and economists… in Singapore — a global financial center. What’s more interesting for me is that they all gathered to talk about the Philippine economy. The back-to-back talks covered the following matters:
- Investment climate in the Philippines, trends, priority sectors and Public/Private partnership projects by Department of Trade and Industry Undersecretary Cristino L. Panlilio
- The latest development in the Philippines’ capital market, opportunities, challenges and its resilience in light of current economic landscape by PSE President and Chief Executive Officer Hans B. Sicat
- The Philippines’ path to investment grade by Nomura Holdings, Inc. Economist Euben Paracuelles
Everyone agrees that the radar of investment bankers and managers is currently focused on the ASEAN economies; and, we need to take advantage of this now. USec Panlilio highlighted 10 macroeconomic performance indicators that substantiate the phenomenal state of the Philippine economy. I will outline most of them here (I was too engrossed listening to their talks that it escaped me to take down notes; although I was able to jot down a few).
- We are the #1 Asian performing stock market in 2011, with back-to-back all-time highs.
- There is a continuous inflow of OFW remittances, which translates to a well-supported and well-driven “consumer power.” Moreover, any decrease in its current velocity is not expected.
- There has been a steady export growth despite the global economic slowdown. This is of course anchored on our business process outsourcing (BPO) industry, which deploys 640,000 people (especially the service exports; 60% voice, 40% non-voice). Moreover, there was a 21.3% (sum-total of external sector) surge in Gross Int’l Revenues by January 2012.
- With the infrastructure projects leading the way, and then growth in exports, we are seeing a very stable and resilient economic growth. Economic forecast “easily” sees around 6-7% GDP growth rate.
- We now have an investment-driven development, with ~30% increase in investments in just a year. There have been a lot of proactive measures put in place by the Board of Investments (BOI) and Philippine Export Zones Authority (PEZA) to lure more foreign investors into investing in our beloved country. FYI, our top five (5) foreign investors in 2011 are: Japan, USA, Netherlands, China, and Singapore.
- We have a robust domestic financial sector that is coupled with a robust credit growth. The outstanding loans grew by 19.3% for 2011, which translates to a better propensity to lend. Moreover, our non-performing ratio is down to 2.39% — the “most sacred ratio”.
- We are starting to balance our budget and have a more efficient revenue collection effort.
- Our global competitiveness rankings have improved: World Economic Forum (+10 pts), World Bank Ranking (+1), Transparency International Ranking (+5). We now have focus groups that make sure we are globally competitive.
- Finally, we are Asia’s friendliest country and we have a huge population, hehe. This means that we have a quite veritable market, especially if they would just add more purchasing power to the population.
With these outlined in the talks, I really hope that more investors would turn their eyes toward the Philippines.
Citius, Altius, Fortius, Pilipinas!
P.S. Mr. Arthur R. Tan, President & CEO of Integrated Micro-Electronics, Inc. (IMI), gave a short talk titled “Resurgence of the Philippines as a Strategic Option for Asia Electronics Engineering and Manufacturing”. On the other hand, Mr. Emmanuel L. Samson who is the Chief Financial Officer of Nickel Asia Corporation (NIKL) gave a presentation titled “Major Nickel Producer with Long Track Record”.
The Philippine Market
A few weeks ago, some time in February, I gave an investment talk to a few OFWs here in Singapore. The gathering was held in the condo-unit of one of my friends here in SG. It was a very exciting, engaging, and fulfilling get-together. I talked about the value of investing and the various types of investment vehicles. I hope to give the same talk to some more OFWs here, the friends of my friends. The timing couldn’t be any better because the fundamentals of the Philippine economy has never been this strong.
I wrote about my presentation on investing because all the participants have finally opened their first trading accounts. I received SMS from all of them yesterday asking for the next step. I’m super excited for them but a bit anxious at the same time because they have decided to invest in the stock market, hehe. I mean, there are the different MF programs out there that are less risky. Anyway, the idea is (and this is what I told them) to not put ALL their eggs in one basket. Cliché, I know, but I’m really hoping they got the message. My only rule is this (at least for newbies in the trade): only put the amount you are willing to lose — this is what I told myself last 2010, what I told my Dad, my aunts, and my friends back in UP whom I have also convinced to experience stock trading in the PSE.
Earlier, I received an email from the PSE, Inc. inviting me to attend the PSE-Bloomberg Conference that is going to happen here in Singapore on Thursday. Although the event is free of charge, it is by invitation only. I will try to gulp down whatever it is that will be discussed in the said conference; and, I will definitely share in this blog whatever it is that I can share.
The Philippines’ fundamentals remain solid, with progress toward investment-grade status noting economic reforms, improved governance and increased investment. The country’s growth drivers have become more diversified across industries, spanning from services (53% of GDP), industry(30%) and agriculture(10%). The government is working to attract investment in roads, railways and ports as a means of lifting the country’s growth potential to as much as eight percent. – PSE-Bloomberg
PSE abOVe 5000
PSEi
It seems as if it was only yesterday when I and my buddies were cheering for the PSEi to reach 4000. I started stock trading when the PSEi was only playing around the 3200-ish range, that was about two years ago. Since then, it has climbed so much already. One of the main reasons why I entered the Philippine stock market was the knowledge that our economy would get stronger and stronger, that we are an emerging market. I wanted to be able to ride with it, and not be left behind. Moreover, the convictions of the stock investors around me were so compelling that I really felt that it would be so ignorant and arrogant of me to dismiss the idea of having some equity exposure. I remember reading in one of Gus Cosio’s post (some time in May 2010) this particular paragraph:
I would really urge everyone to increase asset allocation to the equities market. I had a meeting with some lawyers last Tuesday and before we started the meeting, I had to share my thoughts with them that if one does not have equities exposure over this following 12 months, you will be losing a great opportunity to make money. That is why I am convincing all my friends, relatives and even my kids to buy mutual funds with equity market exposure, if they do not have the wherewithal buy stocks directly. I feel that I am doing them a disservice if I do not try to convince them at all.
March 01, 2012 was a historical moment for the PSE, when the PSEi touched and bore through 5000. Had I not been in a conference, I would have genuinely celebrated the event, with a glass of champagne! On March 02, it closed above 5000 points. Looking at the current PSEi chart, all indicators show a continued uptrend. The index finds support at 4981.3 and a resistance at 5034.4. It might also be wise to pick up some PSE shares.
OV
I could afford not to look at the market the entire week last week because I have been super confident about my positions. This confidence was further fortified after reading the positive outlook of some investors on OV. In fact, Sir Gus’ last post was especially earmarked for OV. For those readers who are curious, I’m still keen on accumulating OV below 0.052/sh.
Yesterday, I met with an associate of an investment banking firm here in Singapore; and, one of the things I learned from him is the value of Patience. Yes, “the greatest power is often simple patience.”
Mining
If I were to interpret the chart below, I’m inclined to suspect that the mining and oil index is not healthy, or probably the investors are a bit wary. I just hope that the index does not stay too long within the cloud, or worse, go below the cloud. The uncertainty is probably due to the current controversy that bedevil the mining industry.
Mining and Oil Index
