Updates on The Philippine Stock Market - April 11 to 13, 2007

April 11 (Wednesday)
Market down by 10.21 points.
PSEi closed at 3294.21
Still testing the 3,300 level after the previous day's (April 10 - Tuesday) challenge. The resistance level holds and is not broken.

April 12 (Thursday)
Market down by 70.99 points.
PSEi closed at 3223.22.
The US markets falls more than 80 points on fears of stagflation and other concerns. With the local equities market failing to break and hold above the 3,300 level the previous days; the drop in Wall Street provides the excuse to profit take after the strong run up during the shortened trading days in the Holy Week.

April 13 (Friday)
Market down by 6.15 points
PSEi closed at 3217.07.
Even as the US markets rebounded and got back most of its losses, the Philippine stock market just consolidates at the 3,200-3,220 support level. The 3,200 level must hold so the market can resume its attempt to close the technical chart price gap at the 3,324 level.

These day's more companies are doing their IPO's (Initial Public Offerings). Pacific Online Systems Corp. (LOTO) just listed last Thursday - April 12 (they offered their shares at PhP 8.88 and the stock closed at PhP 14.00 on Friday), and National Reinsurance Corp. is currently doing the rounds to offer their shares at PhP 3.80. This early, some investors are looking for more shares than the allocation they got. Aboitiz Power Corporation also just signified their intention to offer their shares.
Some listed firms also are conducting secondary offerings. Most recently was RCBC which raised more than PhP 5 billion (they offered their shares at PhP 27.00 each) in order to become the No. 5 bank in the country. Union Bank and Geo Grace are next in line. The current fund raising binges are received warmly by investors. This shows continuing confidence in the Philippine Stock Market.

Recent data and news articles show; tame inflation (lowest in several years), rising Gross Internatinal Reserves (new record highs), strong Foreign fund inflows (the foreign funds outflows during the China stockmarket fallout last month was easily wiped out by inflows in march); rising peso currency (now at around the PhP 48 to $1.00 level and poised to break it), continuing rise of OFWs' (Overseas Filipino Workers) remittances and strengthening asian equities markets (with several of them near record highs ).

Tourism arrivals picked up; Foreign Direct Investent was higher (several notable foreign firms invested in high profile projects in the country - such as the Hotel Project in Makati by the Ayalas and the Saudis) and the GSIS (Government Services and Insurance System) posted record profits from their gains in investment in the local equities market.

The medium to long term bullsh outlook is intact but the May 14, 2007 National Elections is just around the corner. It is welcome news so far that unlike in the past, politics has not really dragged down the market and spooked investors to the sidelines. With so much liquidity in the financial system, owing to low interest rates, investors are looking for investments with good potential returns and are now jumping into equities investment rather than waiting.