The First Quarter 2012 Philippine Stock Market Report

Time to Realize Gain and Wait for the Next Train

The PSEi was in rally mode in 1Q12.  The Government’s PPP Project Offerings have started with the Daang Hari road, the Philippines has one of the biggest GDP growth rates in the world and food raw material prices have stabilized.  Even whole-day trading in the Philippine Stock Exchange which started in 2012 helped fuel the rally.  This was a continuation of the rally that started in late September 2011 at the low end of the PSEi Bands.  Collectively, this was a fruitful six-month rally.  We spotted notable stocks before their share prices surged for our MyRA Subscribers.  These stocks were AC, GMA7, UBP, EEI, RFM, AMC, CHI .  We wrote about them in our Company Reports, Banks Stress Tests Reports and our first Third-liner Stocks Books.  Internally, the situation in the Philippines seems ok.  The Corona trial did little to suppress the rally.  External factors are the ones shaking the PSEi even up to now.  They are the Euro debt crisis, the recovery of the US economy and the Chinese economic slowdown.  The rally elevated the Pymwymi Fund to new heights.  It has already more than doubled in value since its January 2010 inception.


Now, Spain’s debt crisis and the North Korean missile test in the region is spooking the PSEi.  It has also become expensive and has reached euphoric levels.  Upside even if it consummates is seen as minimal.  Even the PSEi Tracker says it’s time to sell/hold than buy.  This has been our recommendation to our MyRA Subscribers since the middle of February.  The advance warning has given them the proper time to act before the downward pressures on the PSEi intensified in mid-March 2012.  In interviews during the latest Analysts’ Meetings, the listed companies are wary about 2012.  Generally, they are on the defensive side mainly due to the Euro debt crisis.

In 2012, we have refined our PSEi Tracker.  It is a fund management tool that signals market rallies and downturns.  It has been reliable not only on the PSEi but the S&P 500 and other markets as well.  We now use the Tracker on a daily basis and compute our own PSEi PER averages daily for it.  Previously, the Tracker was blunt but was still effective on a monthly basis.  In the start of the rally in late September 2011, the PSEi bands, our other fund-management tool have signaled a Buy.  But our Tracker was still blunt and did not signal a market Buy.  Now, both fund-management tools are tip-top and have provided us and our MyRA subscribers striking results to minimize risks and to seek value in Philippine equities.

Disclaimer

The Philippine Stock Market Research report is solely for information. It should not be constituted as an offer for solicitation for the purchase or sale of securities mentioned. The information herein has been obtained from sources believed to be reliable. Whilst every effort has been made to ensure accuracy, we do not guarantee the accuracy or completeness of the report. All opinions and estimates expressed herein constitute our judgment as of this date made on a reasonable basis and are subject to change without notice. No liability can be expected for any loss arising from the use of this report or its contents. As this is general information, it does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may obtain this report.