Philippine Stock Market (PSEi) Suffer Losses for Two Days Now Since US Fed Announces Its Recent Economic Stimulus

At yesterdays market closing, the Philippine stock market is down 2.86% or 186.53 points off the other days closing of 6,513.20 points. Today as of this writing another 175 points down was being lost making the total index points 6,152 now or 2.77% from yesterdays market close. From this years peak of 7,403.65 points last May 15, 2013, it already entered the bear territory which was down on its highest low last June 13 into 6,114.08 or 17.41% points lost. 

With this data, I could bet that at this market level it was already oversold. What causes this one moth losses was;

     1. Market news sell down. This happens when the Philippine government announces that its first quarter GDP was up 7.8 percent more than the expectations of financial institutions. Investors anticipation of the better than expected economy standings have concluded the bullishness by the sell on news strategy even though better economic outlook is still intact. The foreign investors was the most sellers during this period of market sell down.

     2. US Federal Reserves plan to curve its bond buying in the later parts of this year signals almost all financial markets worldwide to sell their stock holdings. These indeed had urged most investors to exit or lighten up their positions in the stock market.

I am still holding some fundamentally stable stocks in my portfolio as this market scenario will rebound soon and at this market level it is an excellent shopping opportunity for highly battered stocks that have a good story. Great discount from the fear of market volatility. 

Companies With Good Fundamentals This February 2012

The month of February, 2012 is the continuation of the stock market rally in the Philippine Stock Index.  This means that the Philippine Stock Exchange index have reached its ultimate highest peak in its history. This took place last February 23, 2011 when it reaches to the 4,997.04 level.  This is because local investors as well as offshore fund managers still relies the bullish trend of the Philippine economy.

It’s good to know how the market is doing the past weeks this month.  Trending to date are oil companies because of the current tension in Iran as it recently imposed an oil embargo to some European countries.  The current oil price (as of this writing) is at US$109.77 per barrel which is seen to be the longest sustained price since January of last year. The Brent spot price is higher at US$126.65 per barrel. This will increase more in the coming weeks if problems in Iran will escalate. Recently, Bloomberg.com reported that SWIFT (Society for Worldwide Interbank Financial Telecommunication) is prepared to cut off Iran’s Central Bank together with its 24 banks and financial institutions to receive its financial messaging service that would possibly unable the country to use the international financial system. Read more on this link: www.bloomberg.com/news/2012-02-24/swift-may-expel-iran-s-central-bank-hindering-oil-payments.html

Among the Philippine oil companies currently traded with high volumes are The Philodrill Corporation, PNOC-Energy Development Corporation, Philix Petroleum, Petron Corporation and Oriental Petroleum and Meniral Corporation. EDC is a blue-chip company.

Another trending sector this month is the financial.  Most banking stocks in the country are already in the blue-chip level.  These were Banco de Oro Universal Bank, Rizal Commercial Banking Corporation, Bank of the Philippine Islands, Union Bank of the Philippines, Security Bank and Metropolitan Banking & Trust Company. Either of these companies have good price increase this month.

In the sector of mining, two good stocks were highly guarded by security traders. They are Dizon Copper Silver Mines and NiHao Mineral Resources. This two have almost tripled their trading prices in just this month. Some mining industries are still laggard as investors are on the sidelines because of the incoming new executive order on mining which will be released in the later date of February this year by the Philippine government.  This will be related to the issuing of Financial & Technical Assistance Agreement (FTAA) to the new mining companies that will apply business in the country. If the said agreement will favor the mining investors, possible candidate for mining that will be good to invest in are Lepanto Consolidated Mining, Philix Mining, Atlas Mining, Manila Mining, Marcventures Holding Inc., Nickel Asia and Apex Mining among others.

The recent problem regarding inadequate power supply in Mindanao is one of the latest concerned issue in the electric power companies. Aboitiz Power is the only public listed company engaged in power supply in Mindanao particularly in areas of Davao and General Santos. It is necessary for investors to put their capital here as it was observed from the last few days of trading that its price was increasing substantially.

That was the good news I have gathered this month in the investment world here in the Philippine economy. It’s up to the reader to take action and be reminded of the consumer saying “CAVEAT EMPTOR” or let the buyer beware.