8:45 am Monday 26 September 2011
All of us watching the stock markets worldwide are likely facing a lot of discouragement right now. Practically everyone is expecting the markets to be more volatile in the coming week. Consequently, risk averse people will keep out lest they implode from nervousness.
Last week, what spooked the market into the disarray we now see was not so much Europe but the actions of the U.S. Federal Reserve. People were expecting a liquidity injection by the U.S. central bank which did not appear forthcoming. The FED will simply buy short maturity government bonds and sell the very long maturities. In effect, there will be no liquidity infusion forthcoming; and given that Europe is already suffering from dollar liquidity, everybody who wanted to get out of positions that required liquidity was out the door. No wonder gold, silver and copper futures started tumbling down in record losses. Oil futures also crumbled under the weight of hedge funds unwinding long oil contracts both in the commodities and options markets. Read more
7:00 pm Monday 19 September 2011
If you had been following the Philippine government’s T-bill auction over the past few months, you’ll be pretty convinced by now that people really have nowhere to park their money. Today, the 90-day T-bill averaged 0.69 % per annum in yield which is really next to nothing. There is even a 20% withholding tax, so the return to the investor is even smaller. No wonder, people are scrambling everywhere to find a good return on their cash.
Philippine stocks did better today than most of its Asian counterparts except Japan were sorely in the red; although I would not crow out loud for the PSEi because in spite of the rise in the index, value turnover was lower than usual. The good news is that the market saw net foreign buying of Php 226 million. Read more
8:18pm Thursday 15 September 2011
For those who are itching to get back in the game, I think MA/B might be a better short term trade. I think many are convinced that there will be production within the next 12 months; and, of course, there is the mine that is being developed by PX. Also, I believe technical traders would have spotted the turning up of the RSI on rising volume as well as a good looking candle on the chart that may presage a bottoming out. Read more
8:31 am Monday 12 September 2011
In Philippine stocks, we probably need to be very defensive at the beginning of this week.
I got this quote from an article on CNBC online headlined: France Says Euro Survival Crucial; Wants Stronger Yuan
“Stock markets tumbled on Friday on news of the resignation of a German executive board member from the European Central Bank. And on Saturday, a sister party of German Chancellor Angela Merkel’s conservatives said heavily indebted states should be threatened with ejection from the euro zone.”
Another headline, this time on Spiegel Online (Der Spiegel is the largest circulation newspaper in Germany and the most respected) said: German Finance Minister Prepares fro Possible Greek Bankruptcy Read more
7:41 am Monday 5 September 2011
I think that the big drop in LC/B prices last week should not discourage us, but instead encourage us to step back a while and examine our risk appetite for mining stocks. Over the past few weeks, the mining sector was where the action was. At this point, many would be asking if the move on some of these mining stocks was over. I think it would be myopic to view the sector in that manner. Undoubtedly, the move in LC/B as well as MA/B and even ORE in the past few weeks had been close to spectacular. In fact, a lot of money has already been made resulting in prices to be vulnerable at last week’s level. I think investors and traders alike should examine their time horizons. I always try to remind people of this perspective. Read more
You probably have read in the newspapers about the forthcoming Initial Public Offerings (IPO). In the past, many have subscribed to IPOs blindly without understanding what they are getting into. Many have lost money thinking that IPOs were a sure thing. Given our advocacy for Investment Literacy, we will be conducting this seminar to help people understand the IPO process, mechanics and how to understand companies that bring their shares to the public. Hopefully, more people will gain understanding of the process and will invest with a critical eye rather than with blind misunderstanding.