The Second Quarter 2012 Philippine Stock Market Report

Banana Nut Pie Recipe

PSEi 2Q12

Trying to establish a new base or undecided?  This marks 2Q12 in the Philippine stock market.  The graph above shows it.  Investors are either going nuts or bananas or both over the market direction nowadays.  ‘makes a good kind of pie, bananas and nuts.  ‘lots of developments internally such as the PPP projects finally going into second gear, the credit rating upgrade and the growth being exhibited by the economy.  Wow.  In the neighborhood, well, just by the door, there are 92 Chinese ships in Panatag Shoal.  Globally, Euro-zone worries still prevail.

A good friend who’s also an analyst has a good indicator if the market is already peaking.  He says if you have friends who don’t invest in the market before that are trading now and acting like seasoned brokers and experts, then the market has already peaked.  Great indicator!

Here’s another one.  Where are we now in terms of valuation?  In two different data sets, we’re the third and fifth most expensive country in the 18 emerging and developing markets that we constantly track.  Sure we have growth, but we’re expensive most likely due to this as funds scramble to markets with growth.  We always remember Russia in our global tracking probably because it is exotic to us and mainly because of how that market moves.  In one period, it’s cheap then in the next, it’s expensive.  Now, it’s cheap again.  Is this bad?  Of course, the answer is no.  This is the very nature of equities.  They don’t go up in a straight line but in fluctuations.  Remember that famous question asked to John Pierpont Morgan in the early 1900s?  “Will the market go up?”  Something like that was asked to him.  JP Morgan said, “It will fluctuate.”  That’s the famous answer to that famous question repetitive up to now.  Please see the PSEi charts we have in 4Q11 and 1Q12.  They’re generally like a straight line up from October 2011.  This plus the PSEi being expensive means we have a low ceiling.  Like in 1Q12, we think it’s best to sell than buy now unless there’s a great bargain.  There are only four deep bargains now from nine in December 2011.  We wish there will be a great sale soon to boost our portfolio again.

P.S.  We’ve been eating and digesting banana and nut pie that’s why the 2Q12 Philippine Stock Market Report is late.  We’re targeting to release our MyRA clients’ Philippine Stocks Books in the next couple of weeks.  Aside from that, we’ve been gathering a lot of observation and making analysis on the Philippine stock market in the past month.  This is in relation to keeping our PSEi Bands and PSEi Tracker accurate.  We’ve prioritized good guidance for our MyRA subscribers over the 2Q12 report in these volatile weeks in the market.  Thank you.


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.