Short-lived Euphoria for Mining and Oil Stocks

Stock	Buy Below	Current Price	Target Price	Average Cost	Return
BDO	60.00	59.05	81.00	60.10	(1.75%)
ALI	18.00	22.75	22.50	-	-
PGOLD	24.00	29.50	30.00	-	-
EDC	6.00	5.88	8.50	5.94	(1.01%)
TEL	2,400.00	2,798.00	3,000.00	-	-
AGI	11.00	12.40	15.00	-	-

Short-lived Euphoria for Mining and Oil Stocks

The mining sector had an ecstasy yesterday because of the IRR issuance and Gold price ascent but the sector was cut short today.

LC/B which is the top gainer yesterday is back in red. Yesterday’s climb is just a fluke. The government policy on no go areas and revenue sharing are still pending, hence the selldown¹.

The bulls though tried to put PX on the green as they battled back from 14.86 to 15.12 in the afternoon. PX fines on the tailing leaks may reach P1B, plus P200K per day for the spill². How about that? PX operations are currently suspended and it does not know yet when it will resume operations. Short term prospect is bleak!

The US stock markets are positive yesterday. Expectedly, our index turns green with 0.41% increase. Value of shares traded is P4.8B. Foreigners have a net selling of P90M today.

Notable stocks net bought by foreigners are TEL-83M, GTCAP-49M,MER-45M,AEV-41M,ALI-41M while notable stocks net sold are BDO-107M,URC-88M,SMPH-71M,PIP-63M.

Prominent gainers are MER-3.16%,JFC-2.23%,FLI-2.29% while decliners were led by LCB-6.67%, PX-5.97%, LC-4%.

BDO- the foreigners net sold P107M. Yesterday selling was P176M and now P107M? Geeez.

The stock rights issued last June 2012 (1:3) at P48.60 per share is affecting the price of this stock. There are now too many shares floating around at a cheaper price. On the positive side, the capital of BDO had increased significantly allowing it to be aggressive in lending to the borrowers thereby increasing its profit.

Duetsche Reg investors sold P122M (66% of the sellers) with an average price of 59.17.

ALI- the foreigners net bought P41M. It increased by 2.25% today!

An insider disposed 60K shares at the 22.82 to 22.95 price level.

PGOLD- the foreigners net sold P2M. As usual, this strong stock is powerful at the 29-30 price level. Today, it even touched the 30 price!

EDC- the foreigners net sold P12M. Sellers and buyers mostly met at 5.88 price, 64% of the trades. Yesterday traders met at 5.85 price. Is this a good sign?

TEL - the foreigners net bought P83M. TEL is just strong right now. It reached the 2,800 price!

MVP said net income for 3rd quarter is expected to reach P9B for the company to hit its P37B target for the whole year. The telco hopes it can increased its net income to P42B by 2014.³

PLDT also reported that it has completed its two-year network modernization program ahead of schedule. The program more than tripled its voice and data capacity. PLDT budgeted P67 billion ($1.6 billion) for the program. ³

Lots of good news today for TEL.

AGI – the foreigners still net bought this stock P13M. However, one thing noticeable is that the buying of foreign is losing momentum. Monday-P250M, Tuesday-P63M, today-P13M. What is next? They will sell?

Yesterday, AGI is in red and I said that today will confirm if this stock will go down from the mountain. It sure did confirm! Anyway, nothing is absolute in stock market but the technical’s are pointing to a not so rosy picture now for this stock. Hey, we are waiting below 11. C’mon!

54% of the trade is at the 12.40 price. That is the closing price. I’m sure there are a lot of trades that happened during the runoff.

Source: pse.com.ph Sep 12 trading activity, COL data

¹http://www.rappler.com/business/special-report/whymining/whymining-latest-stories/12232-mining-irr-no-go-areas,-revenue-sharing-still-pending

²http://business.inquirer.net/81508/philex-minings-fines-may-reach-p1b-due-to-successive-tailings-leak-denr

³ http://www.malaya.com.ph/index.php/business/business-news/12799-pldt-completes-16b-expansion

Note: This is not a solicitation to buy. Buy at your own risk.