Philippine Stock Market is Going Up! So What?

For the past few months, the stock market is down and is always trading below the 4000 benchmark. The investors are reluctant to put money in the stock market. The sentiment is negative. Investors confidence is down and the stocks are low and cheap.



This week, stock prices began to rise. The stock market was triggered by the acquisition of PLDT to Digitel. PLDT stocks have risen up from around 2000 last month to 2400 today. The telecom giant stock rises because its market share of telecommunications industry has increased. Digitel is the operator of Sun Cellular brand. Revenues of Digitel will now be part of PLDT. The subscribers of Sun Cellular become part of PLDT's customer base. PLDT's network also expanded. The competition on the cellular industry is now between Globe and PLDT. Sun Cellular is out because it is now part of PLDT already. SunCellular has a different pricing scheme against Smart and Talk and Text, it actually competes with the subsrcibers of Globe. Little by little Sun Cellular is creeping into the market share of Globe. These are few of the assumptions the investors used when they bought PLDT this week. A lot of them bought PLDT and just like in any market, when the demand is high, the prices go up.

Aside from that, foreigners began buying stocks worth billions of pesos. This means that aside from the Filipinos buying the stocks, these foreigners adds up to the investors, so the stocks becomes a hot commodity being grabbed by everyone, that's why their prices go up. The US unemployment also goes down from 8.9% to 8.8%  last March. US Companies are now beginning to hire people. Business is picking up in the US and when the business goes up, consumers began buying basic necessities or luxury items. When more people are hired, more people can have the ability to dispose their income to buy material things.

I have a friend whose name is John and works in the US. He is an immigrant and last 2008, he was part of the workers laid off by their Company. He was devastated because he needs to pay his house rent, utility bills and food. In order to save on food, he became one of the unemployed persons lining up for food stubs. He rely on those stubs to get by the day. Normally, when he was working, he is buying his food in Jollibee,yes there is a Jollibee in the US. Imagine if John is eating in Jollibee 4 times a month. He spends $5 every meal. In one month, he spends $20 to Jollibee. but because he is unemployed, Jollibee is losing $20 from its revenues every month. Now, multiply that with hundreds of thousands of people terminated and with cases like John, Jollibee may lose in millions of revenue in one month alone. And when Jollibee revenues goes down, its stock price will also go down. That's why unemployment is one of the indicators whether a stock market will go up or down.

This week, the stocks of almost all blue chip companies in the Philippines have risen up and I think it will go up for the next six months. On a longer perspective, I think the Philippine Stock Market will go up. We are an emerging market and we are only in Phase 1, "The Spark" a stage where political, economic and social conditions of the country is beginning to improve. The government gives preferential treatment to foreign investors, and the stock market is going  up. Tourism is improving and large scale infrastracture is picking up. This phase may take years or even decades depending on the performance of our country. It's a long way to go and our country according to analysts is one of the rapidly growing economy.


So what, if stock market goes up, the rich are just getting richer and the poor getting poorer. I will just miss the opportunity to put a tiny amount of money in the foundation I just so care about.

So what, if stock market goes up I don't care anyway. I will just miss the opportunity to profit when it goes up.

So what, if stock market goes up it doesn't affect me. I will just miss the opportunity of parking my money into an investment vehicle I love.

So what, if stock market goes up I do not feel the effect of it. I will just miss the opportunity of helping our country grow no matter how little it is.

So what, if stock market goes up I will ignore it. I will just miss the opportunity to save for my retirement.

On a side note, I would like to share whether I make money in the stocks or not. Below are actual purchase price I bought, its price today and the returns I have.

Purchase Date	Stock Symbol	Purchase Price	Price Today	Returns (Profit)
12-Jul-10	TEL	2,440.00	2,400.00	-2%
16-Sep-10	FGEN	13.42	13.04	-3%
23-Nov-10	SMPH	11.58	11.70	1%
19-Jan-11	LC	0.4850	0.4950	2%
26-Jan-11	MBT	62.00	68.45	10%
16-Feb-11	ALI	14.70	16.44	12%
15-Mar-11	NIKL	19.94	20.50	3%

Disclaimer:

Investing involves substantial risk. I do not make any guarantee or other promise as to any results that may be obtained from using this blog. No reader should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing the prospectus and other public filings of the issuer. To the maximum extent permitted by law, I disclaim any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations in this blog prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.