Common Sense Trading - A Blue Jeans Approach to Philippine Stock Market Trading

A few surprises this week... PSE still up, Clinton stays in the race, BIR collects higher than expected taxes (+12.6% 1Q08) , a " fusion man " flies over the alps. The PHILIPPINES STOCK EXCHANGE INDEX managed to end the week with a record of eight successive days of gains. Trading volume today (Friday - May 16, 2008) was at Php3.38B. Even though the rally lasted eight days, it looked rather weak to me. If it won't continue through the next week or speed up, I will become even more bearish. Earnings reports for 1Q08 income as against last year's were mixed. Here's a few: MBT income down 16% SECB up 10.3% FPH down 79% RLC up 19.8% ABS down 13.6%

The PSEi has been rising for six and a half days. Good reports of first quarter income encourage buying as they indicate which companies can weather the Global slowdown and even go against the flow. Oil however, is still hogging the spotlight and I suspect it is the main reason the almost seven day rally isn't too strong. PSEi was at +12.5 this May 15, 2008 at 10:17 a.m. The brighter side of it is that we're rising notwithstanding the steady rise of crude prices.

After five straight days of going up, we haven't gone very high. The PSEi closed at 2849.29 on May 14, 2008. Value turnover was at respectable level of around Php3B. Those numbers are a far cry from 3900 and Php5B average daily turnover at some months last year. The rally is weaker than I hoped and I fear will not last until the end of the week. I hope I'm wrong.

Food production is relatively easy for the Philippines. Why don't we feed the world's growing appetite for cereals? If we decouple food production from oil dependence and restore economies of scale to our farm estates, I think we have more than just a good chance. One Two Punch Receiving a one-two punch, our rising economy that boasted robust growth last year, is saddled with rising oil and food prices and everyone is wondering how to cope. Higher Food Prices Can Be Good I would like to suggest we consider the proposition that rising food prices presents an opportunity for the Philippines to assert one of its greatest potential competitive advantages. On the assumption, which I think is fair, that it is relatively easy to produce food in our country, we are faced with a huge economic opportunity. The first key: Reducing Oil dependence for food production I think the key to harnessing this advantage would be to find ways to produce the food with little or no need for petroleum p...

A perusal of the Manila Bulletin today (May 12, 2008) reveals that there is an upbeat market sentiment for this week. Maybe the giant San Miguel Beer bottle on Ayala avenue right in front of the PSE has something to do with it. After watching the market make a few huge steps down since April, it's nice to hear some bullish sentiments. Tsupitero thinks any rally below the 3050 level is nothing more than a dead-cat bounce. I can't define what a dead cat bounce is but the name implies enough. We don't want that. Anyhow, I'm still betting on Philippine Stocks for '08 as a whole. Time will tell.