Anthony G. Longjas - Philippine Stock Market Investing

Philippine Stock Market Investing

Dead cat bounce?

January 28, 2011

The Philippine Stock Exchange was battered in the early part of the week as it buckled from a 4000 crucial support and has gone all the way down to 3881. While it may have hit its rock bottom and seems to be on its way back up, the Makati bus bombing happened. The PSE would have bounced beyond the 4000 level, but instead it went back to 3920 even though our twin Jakarta Stock Exchange increased +2.67% the same day. It barely touched 4025 today and settled at 3970 as news about Japan’s credit downgrade was released. The PSE appears to be in sync with the Dow Jones as they both fail to convincingly break 4000 and 12000 respectively.

Here is a follow-up on the stocks that I featured in my previous entry:

Finally, living up to the longstanding rumor, Manila Mining (MA) rose from the dead (pun intended). It increased by +21.74% today at 0.028 with 600,000,000 buy orders at the close! The last time I checked, MVP was closing in on Manila Mining but who knows, he might have already moved a sleight of hand on this one. I expect that its price will still surge yet again if the company starts to re-operate but, as of now, I think it’s still a pure speculation play.

SMC was the strongest issue last Thursday after RSA announced that it would push through with its planned 200-250 range 2IPO within the first quarter of 2011. SMC jumped from 160 to a high of 184.

From nearly breaching 20 to taking a plunge to 12 then bouncing back at 15, PCOR was one of the most volatile stocks last week. I noticed that one could have a hefty profit by day trading this stock as it usually has 5% swings. Just bear in mind the10:30 habit -- buy at 10:30 then sell before closing. To make it more interesting, Deutsche Regis has been accumulating this stock at the 14 – 15 levels. My instinct tells me that PCOR might finally break 20 by middle of next month and will double its price by the end of the first quarter especially if RSA finally buys 90% of the company. I expect it to reach at least 17 by next week.

MPI worries me. MER already fell about 15% but MPI's price has been increasing. News regarding the Lopezes selling their shares in MER at a right price is all over the place. Did MVP already secure majority shares at MER, which is why its price is going down? Or is it just RSA dumping MER shares so that MVP will have a hard time getting the needed Lopez shares to get majority seats? Things are becoming exciting as the March board meeting approaches. Chart-wise, MPI still needs to break 3.80 for the uptrend to be intact. Short-term target price (TP) is still at 4.2.

MBT just crossed its 20-day moving average and it’s on its way to the 70’s by next week. I can see a peak at 75 before it resumes a downtrend.

I'm excited for next week! The Philippine 2010 GDP results will be out on Monday and Chinese New Year is on Thursday. Hopefully we'll all be celebrating as well!

RSA’s Golden Touch and the Battle for Meralco II

January 7, 2011

I am still amazed by the RSA phenomenon. It seems that any company that Ramon S. Ang touches turns into gold. The latest of which is CYBR with an impressive 25% increase today. Mid-November last year, I read that the SMC and PCOR tandem will reach 200 and 20 respectively. During that time SMC was just about to break into the 100 level while PCOR was still trading below 10. SMB was also around 10 and is currently trading near the 30 level. I was very disappointed, to say the least, that I hadn’t jumped into the fray. At the current price of SMC (173.1), RSA still thinks that the company is still undervalued considering that the profits of their investments in energy and power will only start to kick in this year. I believe that 200 is just around the corner and I am confident that San Miguel Corporation (SMC) will be able to break the 200 level this month.

With the recent acquisitions and expansion of SMC, one can only speculate that the group is poised to challenge the Meralco ownership of archrival Manny V. Pangilinan (MVP). Rumor has it that RSA is courting again the Lopez group for their remaining shares in the company. MER’s stock price has increased around 40% in a month from 175 to today’s close of 248.

On the other side of the fence is MVP bannered by parent company Metro Pacific Investments (MPI). MVP’s group still holds majority shares in Meralco—a monopoly that is directly related to around 50% of our country’s GDP. From a low of 3.33 last December, it increased 24% to 4.12 as of today’s closing. In the battle for Meralco in mid-2009, we saw MER reach 300 and MPI, being the “winner”, reached a high of 6 while SMC dropped to 55. Will RSA and his party offer a formidable challenge to MVP considering its recent phenomenal run? We’ll see. This month looks pretty exciting.

Stock to punt this week: MA/MAB

Rumor has it that RSA is expressing interest to venture to mining through Manila Mining (MA). What makes it more exciting is that MVP is “close” to make a deal to buy MA because of its proximity to the PX mining site.