The Effect of Interest Rate Hike to Philippine Stocks

Interest rate hike, the monster in every investor's cabinet, was finally started yesterday as announced by Bangko Sentral ng Pilipinas. An increase of 25 BSP(basis point) or 0.25% was implemented.  So are we expecting another panic in the stock market now?

Stocks 101: The Basic Part 2

Last time I've already discussed the definition of stocks and the essential rights of a shareholder. For the previous post please click here, Stocks 101: The Basic Part 1.


Note that whenever I mention stocks, I am referring to common stocks only. I will not be touching about the preferred stocks since I'm not investing on it and only a few small time investors have it.

EDC (Energy Development Corporation), A Tsunami Stock

Since 2009, I have seen the potential of this company because its business is Power, which is rapidly growing in the Philippines. In fact, next year, the total capacity of the all the power plants is at the critical level due to high power demand. Law of supply and demand will favor the companies in these sector but EDC has more advantage. With the oil price expected to surge up due to Middle East revolution and Japan crisis, EDC will be the least affected since its fuel are renewables (Geothermal, Hydro or Water and they will start the Wind next year).

Below is my e-mail to my friends last month, Feb 17 when EDC stocks is at 5.5+ level.

New and Views: PH and Japan Economy

PH Economy
For the first time since 1998, our country, the Philippines, have a budget surplus. In short, the government save some money (finally, our government became a role model to all the Filipinos). This is a sign of good governance and if sustainable will be translated to growth. Economic growth means more jobs and more jobs means more money for the common people. Some of these money, hopefully, will be invested to our stock market....Hurray!!!

For complete news, see the link below:
http://www.bworldonline.com/content.php?title=Surplus%20for%20January&id=28077


Japan Economy
Every single day since Friday last week, news about the earthquake and tsunami in Japan are bombarding us nonstop.

Stocks 101: The Basic Part 1

It's been a long time since I posted in this blog since I was busy with new projects this year and studies (about Options, Korean stock market and Derivatives). However, I have several friends who occasionally ask me about the stocks basic so I decided to continue this blog.

What is stocks?
Stocks is a piece business own by the shareholders. To understand it, let us take SMPH as an example.
SMPH or SM Prime Holdings is the company that own and operates the SM Malls in the Philippines and China.  This company is divided into 13,898,943,067 outstanding shares or stocks. Owning one of these stocks will make you a part owner of those malls...so does it mean I can go to any SM mall and do a shopping spree for free? Or can I demand from the sales lady to prioritize my purchases during the midnight sale since I'm a part owner of SMPH?  Dream on...

News and Views: EDC, SPH,

EDC
Price = 5.78,  PE(TTM) = 12.08, ROE (TTM) = 30.40


Due to expected power crisis in the Philippines, EDC announced to improved its power generating capacity.Several projects are already started including the rehabilitation of Bacon-Manito (BacMan) geothermal complex in the Bicol region.

As I have mentioned in my previous post, Christmas Sale at PSE, EDC is one of the big player in the Power and Energy Sector and based on my analysis, its stocks should be price at P8.5 per share. The company's performance are outstanding and are expected to grow further once its projects are completed. In addition, EDC can benefit from the newly open Wholesale  Electricity Spot Market in the Visayas region where several of its existing plants are located particularly  the geothermal field in Leyte.

the Mediocre and the Outstanding in the Mining and Oil (M-O) Sector

I was reading one of the blog about the Philippine stocks when I noticed the post he/she made on Dec. 22 about the most recent movements in the Mining Sector of the PSE particularly AT, PX, NIKL, LC and ORE. I wonder if I missed anything about these securities that's why I made a review of their business performance. Below is the summary:

News and Views: AP, CEB, COAT

AP
Price = 31.75,  PE(TTM) = 12.77, ROE (TTM) = 21.66
The National Irrigation Administration gave the go signal to Aboitiz Power AP) to perform the feasibility study for the expansion of  Magat hydroelectric power plant in Isabela.

This is just one of the project being pursued by AP as a response to the fast growing demand of our country. As I have said in my previous post, "Christmas Sale at PSE", AP stock price is still expected to go up in the next 2-3years. My valuation for the said stocks is at Php48-55.

News and Views: TEL, EG, MEG, MER, PERC

TEL, EG
TEL: ROE-5 = 39.86,  PE(TTM) = 10.98
EG:   ROE-5 = - ,         PE(TTM) = -
ePLDT, a company owned by PLDT(TEL), sold its 75% stake in the operator of the Netopia Internet cafes to IF E-Game Ventures Inc. (EG). ePLDT's serviced revenue decreases by 1% to 7.9 billion from January to Septermber this year.

In my opinion, the moved was a win-win for both parties. ePLDT can now focus its resources on its core business which is more profitable while the Netopia Internet franchise will complement EG's business. IP E-Game Ventures Inc. (EG)  is engage primarily in the business of interactive gaming and content distribution.

Important Announcement

I was advised by my friend, who happens to be a lawyer, to remove and refrain from copying news from other source because I might face legal issues in the future. I thought there's no copyright issue about copying news since it is a common practice in the web and blogosphere. My intention was just to gather information about the listed companies in the PSE however in order to avoid being sued I will try to figure out how to present this information gathered in a clean and legal way. I'm looking at the possibility of News Aggregation but I will still need to check if there's no loopholes in the said practice since the said activity was a hot issue in the US. For the meantime I will just post weekly review of stocks and opinions on about the happenings in the PSE.