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Miko's Blog for August 2010

Aug 31, 2010

Sometimes, the market gets "saved by the bell", so to speak, when we have a holiday. Unfortunately, it wasn't lucky for the bulls this time around. I saw DBP-Daiwa still selling some stocks this morning. I wonder if that is a HK fund.

In yesterday's "Biz Buzz" column in the Philippine Daily Inquirer, the writer noted that Philex may be interested to buy Indophil's 37.5% stake in the Tampakan mines. I guess this is reason why shares of PX has been very strong recently. If PX will be able to acquire this, it will provide them with a replacement to their Padcal mines, which is reported to be depleted already by the year 2017. I think I may have taken my profits too early in PX today but I don't care as profits are very hard to get by nowadays.

After being extremely strong in the last couple of days, someone seems to have pulled the lights out in LIHC. Looks like he caught a lot of fish again this morning (hehe).

After being quite bearish at the start of the month, August even turned out to be my best performing month of the year as I made almost 10% in my portfolio this month alone. For the last two years, the cycles of the market have been out of sync and have been acting abnormally. August is suppose to be the most bearish month of the calendar yet I bet a lot of people made money this month. Can we conclude then that the 4th quarter, which is traditionally bullish, will be bearish this year?

Aug 27, 2010

I am quite perplexed by what happened to the market. After being extraordinarily strong yesterday, it was extraordinarily weak today. And that's in spite of the better than expected GDP report for the 2nd quarter. Anyway, I lightened up on the portfolio today, just to be on the safe side. I don't like it when something happens that is totally opposite to what I was expecting. For those who didn't have information about the index because of a bug in the PSE's computer system this morning, the PSEi was actually down by 36 points today.

Anyone noticed DBP-Daiwa selling across the board today? I wonder why he is suddenly panicking.

The only rose among the thorns today was PX, which was up by another 7.4%. I don't want to say anymore that "something must be brewing here" because, everytime I say that, the stock goes down (hahaha)

... just like what happened to ACR today. I bought the stock at around 0.90 the other day and when I saw someone big in our firm buying near 1.00, I decided to hold on. I was thinking, this guy probably knows something bullish in this stock that I don't. Not only did I had some bias in the stock, but I knew some of our traders bought near 1.00 so it was very uncomfortable to sell even when I saw that the momentum was shifting downwards already. Of course, when the stock came closer and closer to my cost, I got threatened and I had to protect my interest already. I ended up selling at cost today. Sometimes, I really prefer trading when I don't know anything. Sabi na kasing hindi puedeng i-advance ang Christmas gift eh! :-)

Aug 26, 2010

Could the market actually be in the midst of a parabolic rise?! All we need now is a little bit of help from Uncle Sam, or maybe we don't. :-)

Judging by the volume of transactions today, could PX actually have made a major bottom at 9.25 yesterday?

Something is definitely brewing here in ACR. Could there be an Advance Christmas Regalo? No, that wasn't me buying this morning. :-)

Saludo talaga ako kay boss Chucky! Just when everyone was trying to get a couple of flucs in LIHC, he comes up with a surprise and runs up the stock by 30%! Will he do it as well with his other issues?

Aug 25, 2010

A friend of mine pointed out to me that, of the 1.4 million shares of ALI that ATR Kim-Eng sold at 14.00 yesterday, 500k shares were sold 30 seconds after 12pm. I looked at the time and sales in COL and he was right. ATR did sell 500k shares 30 seconds after 12pm. I was thinking to myself, oh my God! Someone is trying to sabotage this market. So, what I did today was I posted buying 10% lower on all the blue chip stocks. But when I saw ATR buying back his ALI today, I just laughed at myself. Congratulations to Mr. BPI Securities for making a million pesos today! (I would like to send my condolences to that trader in ATR).

With what has been happening since yesterday, one would probably think that foreign funds were probably net sellers already today. You would be surprised to know that they were net buyers again today by P1 billion.

All of a sudden, there seems to be a lot of bargains in the market.

Aug 24, 2010

Didn't you wonder why the market was suddenly down by 82 points at the close? This is because someone from ATR Kim-Eng sold down 1.4 million shares of ALI at 14.00. I presume that that was an error trade. I really pity the trader who made that error. Assuming ALI will be climbing by 10% by tomorrow, that trader stands to lose P2 million. These sort of errors don't happen in the old trading system because one is only allowed to sell a maximum of 3 fluctuations down. Now, it's no holds barred. I think the PSE should do something about this.

Incidentally, ATR Kim-Eng was also the one who sold down MER at the close. Hmmm...could someone intentionally be pulling this market down or maybe someone there in broker 220 is just really pikon about this market.

I would like to salute Mr. HE Bennett in CMT! :-)

Fearless forecast - PSEi will be up by more than 1% tomorrow ( c/o ALI ). :-)

Aug 23, 2010

Definition of Decoupling - A Situation in Financial Markets where prices of shares in one market move in opposite direction to the prices of shares in another market. :-)

I don't think I still remember the last time that foreign funds were net buyers by more than P1 billion in one day. Today, they were net buyers by exactly P1.008 billion. My best guess is, we are now at the beginning of a parabolic rise. I'm crossing my fingers!

I'm very surprised about how strong the property sector were but could they finally be overbought already right now? Cement issues played catch up as well in the last couple of days but some may also be quite overbought already. So, what's oversold then? My best guess is that Lopez stocks will have a return bout.

One of the highlights of the day was ACR, which was up by more than 20% with 30 million shares changing hands. Obviously, someone from our brokerage firm, HDI Securities, noticed it when it declared an income of P439 million in the 1st half of 2010 last week. Not known to many, most of ACR's revenues are actually coming from power generation. Good news from "The Land Down Under" are what the shareholders of this company are waiting for.

Aug 19, 2010

The story of the day was definitely MPI. Obviously, a big foreign fund is trying to get in and is mopping out all the shares in the board. Sabi nila, May Pera Ito. hehe

It's been quite a while since I've seen the market trade with a value turnover of over P5 billion but it happened yesterday and today. Furthermore, foreign funds are aggressively buying into the market once again. Yesterday, they were net buyers by P423 million and today, they were net buyers by a whopping P825 million. Could this be the start of another big uptrend or is this a contrarian indicator? Let's hope the Dow doesn't spoil the party.

Properties and the Lopez stocks all look overbought to me but can they defy gravity?

In a quarterly securities filing last Monday, Soros Fund Management reported owning substantially fewer US listed stocks than the three months earlier. The fund listed $5.1 billion of equities as of June, down 42% from $8.8 billion at the end of March ... The fund firm said it owned 5.24 million shares of the SPDR Gold Trust worth $638 million as of June 30 ... that was the fund's biggest holding by dollar value.

Mr. George Soros is obviously very bearish on the US equity markets. Let's just hope he's wrong but, if not, then, we can always hope that our market can defy gravity as it always has done in the last few months.

Aug 18, 2010

Congratulations to all those who made money in the Lopez stocks and in the properties today! For those who already cashed-in, well and good. For those who are still holding, I wish you good luck by tomorrow.

Blue chips are not participating in this rally except for one or two issues and some third liners are even dropping. The problem now is, if you sold your Lopez stock and properties today, where do you shift now? I can't find anything yet at the moment.

Despite the big rally in the Dow last night, it still looks quite iffy to me. There are plenty of talks going on right now of a bubble in the bond markets. Bond traders are obviously betting on a "double dip" but the equity markets are just in a range. So, who's making the right call?

Aug 17, 2010

Just when I thought properties were already dead (or might consolidate for now), they have begun to trend up once again. New highs are probably in for these issues once again.

I'm quite surprised by what happened to the Lopezes. Obviously, we all know that Lopez are all in play right now. However, I did not expect LPZ to continue to be as strong as it was today and it was even FPH that was the weakest amongst the four Lopez issues. Another surprising behavior was FGEN, which also was relatively strong. It's really a guessing game on those earnings reports on whether the market will sell on the news or not.

Of the three recommendations in my newsletter yesterday, one flew significantly today and the other now looks poised to trend up strongly and break above its previous high. As Michael Jordan used to say, "Come fly with me". :-)

The last recommendation I gave was of a 3rd line issue and it failed miserably. I have to say, 3rd liners are really out of flavor nowadays and it is now just the 2nd liners turn in the cycle. Maybe 3rd liners will climb once again sometime in the future but probably not yet. For the moment, I'm just sticking to the 2nd line issues.

Aug 16, 2010

AP, AGI, GMA7 and MEG declared their 2nd quarter earnings last week and prices fell. Last Friday, FLI and MBT declared their 2nd quarter earnings and prices climbed. So, should earnings really be viewed as a "sell on strength" nowadays or not? From the way I see it, it would depend on where prices are within the trend once they declare their net income. This afternoon, LPZ and FPH declared their 2nd quarter net income and both came out above expectations. The thing is, since LPZ is at the highs right now and FPH had just broken above its consolidation, is it possible that LPZ will "sell on the news" and FPH will "buy on the news"?

I was thinking last Friday that mining was now "in" but it would seem that it isn't mining that is "in" but just AT. I've been hearing rumors of a certain creditor that has converted his loan to shares and is now in negotiations to sell his shares at a significant premium to the market. News this morning also stated that the company has declared a net income of P460 million in the first half of the year from a net loss of P1.169 billion in the same period last year.

Value turnover was kinda bloated today due to an almost P750 million cross transaction in MBT today at P61.00. I wonder who the buyer and seller of this one is.

Congratulations to all those who bought one of my recommendations in my newsletter in the last couple of days, SCC! ... One of my other recommendations looks good to go as well, given a little bit more volume by tomorrow perhaps?

Aug 13, 2010

Property is out and now Mining is in! Obviously, AT is now leading the way. I wonder what is up with this one as volume was huge today.

I'm surprised by LPZ and BEL today. Target prices were already achieved in my books but it appears like they still have more room to go up from here.

I was looking at SOC this morning because it was already oversold but it's a good thing I didn't hit the button as a disclosure came out today that its President was selling at current levels. Unbelievable!

Tsupiteros probably have mixed emotions about DGTL right now. The good news is, the foreign selling may finally be over as the stock registered a 60 million block sale today, not to mention, a 65 million cross transaction at 1.41. The bad news is, the company announced is 2nd quarter earnings today and stated that they lost P188 million. So, is DGTL bullish or bearish? Technically, the stock is neutral.

Notice that a lot of issues are selling on the news when their earnings come out. I think everybody knows that the 2nd half of the year will not be as great as the 1st half of the year in terms of economic activity. This is most especially true here in the Philippines because some earnings were artificially bloated because of the elections. For those who know how to do Elliott Wave, didn't we just do a complete Waves 1 to 5 at 3539? The only thing that is making me doubt on whether we have already peaked or not is that, I just don't think we've seen a euphoria stage yet. Of course, I've never read any book that says that a euphoria stage should happen first before a peak would occur.

Happy Friday the 13th Tsupiteros!

Aug 12, 2010

After looking quite resilient in the last couple of days, the Dow broke below its support and dropped by a whopping 265 points. While some people here in the PSE don't believe in ghosts, they certainly got spooked there in the US last night.

After climbing very, very strongly in the last few days, MEG and AGI were one of the top losers among the big caps today in spite of the fact that they reported strong earnings for the 2nd quarter. Why were they down? For the first time in so many days, foreign funds were heavy sellers in both issues today. I guess with the earnings already out, there's not much to look forward to anymore.

Song of the Day - "Why don't you tell me where it hurts now baby..."

Advanced Happy Friday the 13th Tsupiteros!!! :-)

Aug 11, 2010

Very rarely do I see a stock climb very strongly the previous day and close the day at its highs, yet, announce bad news the following day. It happened to SCC today as they announced that they were assigning its equities in DMCI Power Corp. and DMCI Mining Corp. to DMC. The market acted today as if it were bad news but was it really bad news?

Another story of the day was SOC as the stock dropped by 35% today. News came out that they were plugging and abandoning a well because they failed to find oil. Mukhang maraming naSOCa dito.

Except for FGEN, all the Lopez stocks moved today. Their gains today are indicative of how attractive the stock is in the market. LPZ gained the most, followed by FPH, then, EDC. FGEN is the most unattractive amongst the four issues, as judged by the market. Of course, at some point, they may start playing the game, trip to Jerusalem. 

At the close of trading today, ATR Kim-Eng crossed 451 milllion shares of FLI at P1.13. Anyone care to tip me on who the buyer and seller was? :-)

I'm quite surprised by the behavior of the market today. I was expecting the market to drop quite a lot today, given the performance of the Dow last night and the Dow futures this morning. Bilib na ako if the market continues to hold on to its gains by tomorrow if the Dow drops big tonight. 

Aug 10, 2010

I had a great time in yesterday's EB of FinanceManila in UCC Tomas Morato. Congrats to Boss Dragon for a successful EB!

I heard that Deutsche Regis is currently doing a roadshow right now regarding DMC and SCC. Rumor has it that they have pegged targets of P25.00 and P150.00, respectively.

Ghost month officially starts today. Sorry, but I don't believe in ghosts. :-)

Dow now on the brink of a gigantic move very, very soon either up or down. Place your bets!!! I've already placed mine. :-)

Aug 7, 2010

Whereas MEG continued to form new highs, FLI corrected back down. What was the difference between the two? MEG registered net foreign buying yesterday of P241 million while FLI only registered net foreign buying of P14 million. Today, foreign funds bought P308 million on P507 million value turnover while foreign funds only bought P77 million on P195 million value turnover. In fact, since yesterday, foreign funds have already bought P1.6 billion in the market. All the local funds are getting out and are taking advantage of the foreign funds' "gullibility". Could they really be that stupid to be buying at the highs? In the stock market, high (and low) are always relative. :-)

AP announced an almost 700% increase in net income yesterday, yet, the stock was only up by 0.71%. Obviously, the market has already priced-in whatever bullish fundamentals there is in AP.

There is a flaw in the pre-close system. Anyone noticed how PNB closed yesterday? Oh well, I guess this is still a lot better than the old system wherein people can just simply mark the close by hitting the sellers' price by one board lot.

Congratulations to all those who followed my recommendations in my newsletter in the last couple of days - MWC, BEL and CMT! :-)

By the way, HDI Securities was one of the biggest sellers in BEL yesterday. No, that wasn't me and I am not an asshole to be recommending something in my newsletter only to be able to sell my own position. In fact, as much as possible, I only recommend stocks where I don't have a position. BEL, right now, is a "buy the dips" with a possible target of around 2.30.

What do I have in my portfolio right now? One stock that I have right now is VLL. Notice that I never recommended it in my newsletter in the last couple of days nor did I even mention it.

Aug 5, 2010

The story of the day were from the twin property counters, MEG and FLI as they were not only just in the top gainers of the day, they were also the most actively traded. What is intriguing about the performances of these two issues today are their volumes. MEG's value turnover today was P462 million while FLI's value turnover today was P405 million. Obviously, some huge institutional funds are getting into these stocks right now. I guess if these funds are willing to buy big into these stocks at these levels, then, the bulls have nothing to be afraid of. AGI, which is the mother company of MEG, is also attracting some huge foreign buying recently. Just from July 29 alone, foreign funds have bought P433 million worth of AGI already. Can you just imagine the grin on Mr. Andrew Tan's face right now.

Aug 4, 2010

The market registered a new 52-week high today and is continuing to trend up, however, if you picked AP, EDC, FGEN or GLO, you'd probably be scratching your head right now. Obviously, stock selection is of utmost importance nowadays.

BDO Securities seems to be very, very bullish in the market right now as I see them aggressively buying everything left and right. Dude, I'm with you! :-)

Aside from RVO, what else is in vogue right now? Obviously, properties now have the momentum to form new highs.

From now on, I'm staying away from all the previous high-flyers like AP, AEV, JGS, URC, DMC and the like. While all of them are still trending up and my still form new highs, I think the bigger returns will now come from those that are lagging behind.

Congratulations to all those who followed my recommendations in my newsletter yesterday - RFM and ALPHA! Alpha, by the way, in Latin stands for "The Beginning". :-)

Aug 3, 2010

The market appears to have already broken above its consolidation but it would seem that no one believes it anymore as value turnover continued to be just a mere P3 billion. I would guess that it's the same situation in the US wherein the Dow has already broken above its resistances last night yet a lot are still doubtful. Could we be actually looking at a bullish Ghost month or are the markets merely "nanghuhuli"? For the last two years, seasonal patterns have been in disarray. Is it possible that we are going to see a bullish 3rd quarter and a bearish 4th quarter? We'll know soon enough.

I have been wondering for the last couple of weeks why AGI has not moved despite the strong performance of MEG in the market and the ever increasing number of gamblers at Resorts World everyday. Finally, the stock has broken out of its consolidation and is now trending.

Congratulations to all those who have been following my AGI recommendation in my newsletter in the last couple of days.

Quote of the day - "The battery that keeps on going, going and going" (from the Energizer battery commercial) .... could that have been the correction already? RVO certainly seems to be in vogue right now.

Aug 2, 2010

The market is still quite iffy but I'm hopeful.

PNB has risen back up from the dead and is back to the 40.00 level. I wonder what BDO Securities know that we don't. Even Deutsche Regis, who has been a big seller of the stock in the last few days, suddenly became a net buyer today. Obviously, the play in here might not be over yet.

I would like to congratulate all those who made money in one of the recommendations in my newsletter in the last few days - HLCM.

Quote of the day - "With great power comes great responsibility" (from the movie, Spiderman)

Aug 1, 2010

Dear PSE,

While I appreciate that you guys are working overtime there and were able to upload the daily quotation report last Sunday afternoon, there were a lot of issues that were missing in that report like MARC, LPZ, MEGW2, PNB and ALPHA. God only knows what else is missing in that report. Furthermore, the total net foreign buying and selling does not equate to the net foreign buying/selling per stock. If you add up all the net foreign activities per stock, the PSE would have been net foreign selling by P517 million. But if you deduct the values at the end of the report, net foreign selling would only be P189 million. So, which is which?

I sure hope you can fix that report as soon as possible as a lot of people are relying on that report for their decisions in the market.

Regards,

Miko Sayo