Stock Update as of December 20, 2012

Stock Update:

The PSEi experienced a correction and is a great opportunity to buy. This is what we call "dips". Imagine a mountain climber sprinting towards the top of the mountain. Every now and then, the climber needs to rest and catch his breath, before resuming his climb. Just like the PSEi, it needs to rest for a moment before moving upwards again.


MEG - cp 2.71, tp 3.34, bbp 2.9


MPI - cp 4.48, tp 6.35, bbp 5.65 *buy! (tp was decreased to 6.35 as per COL evaluations)


Ayala Corp (AC) - cp 528, tp - 520, bbp - 452 *sell.


Banco De Oro (BDO) - cp 75.3, tp - 86, bbp - 75 *stop buying.


Aboitiz Power (AP) - cp 36.7, tp - 38, bbp - 33 *nearing TP. be ready to sell.


EEI Corporation (EEI) - cp 9.9, tp - 10, bbp - 8.7 *TP was hit. sell!


First Philippine Holdings (FPH) - cp 88.85, tp - 110, bbp - 96 *buy!


JG Summit (JGS) - cp 38.4 tp - 40, bbp - 34.8 *tp was hit. be ready to sell.


Metrobank (MBT) - cp 99.1, tp - 120, bbp - 104 *buy!


SM Prime Holdings (SMPH) - cp 15.96, tp - 17, bbp - 14.79 *stop buying. be ready to sell.

Another choice would be to hold off buying for this month, and see the Future Valuations of COL next year in January 2013.

Merry Christmas to all, and a Prosperous New Year!

Listed Companies requiring additional float

The Philippine Stock Exchange reported that as of December 7, 25 companies have yet to comply with the minimum public ownership of 10%. The exchange is giving them until the end of the year to raise their public float or face an immediate trading suspension for 6 months. If the companies continue to remain non-compliant, the listed company would then be delisted by July 1, 2013. Out of the 25, FMIC, TOL, and ETON have already expressed that they will delist from the exchange. On the other hand, Globalport 900 (PORT) has just reported that it will soon be compliant as its majority stockholder sold its shares. PORT added that they are just waiting for the proper documentation to report who bought the shares.

Stock Update as of December 11, 2011

Stock Update:

AC tp was hit. Selling my AC now at 528. gonna add more to my MPI positions.

Also, MEG's tp was raised by COL. It is now 3.34.

so,

MEG -  cp 2.71, tp 3.34, bbp 2.9

MPI  - cp 4.51, tp 6.5, bbp 5.65 *new addition

Ayala Corp (AC) - cp 528, tp - 520, bbp - 452 *sell.

Banco De Oro (BDO) - cp 75.3, tp - 86, bbp - 75 *stop buying.

Aboitiz Power (AP) - cp 337.2, tp - 38, bbp - 33 *nearing TP. be ready to sell.

EEI Corporation (EEI) - cp 9.86, tp - 10, bbp - 8.7 *be ready to sell.

Bank of Philippine Islands (BPI) - cp 95.35, tp - 91, bbp - 79 *sell. will be removed on next stock updates.

First Philippine Holdings (FPH) - cp 89, tp - 110, bbp - 96

JG Summit (JGS) - cp 37.75, tp - 40, bbp - 34.8 *stop buying.

Metrobank (MBT) - cp 104, tp - 120, bbp - 104 *currently at BBP.

SM Prime Holdings (SMPH) - cp 15.9, tp - 17, bbp - 14.79 *stop buying.

Tis the Season to be Jolly by Gus Cosio

by Gus Cosio

Philippine stocks have done so well over 2012. I remember that after the first quarter this year people were already saying that the PSEi was expensive. Of course, we saw some consolidation on some days in 2Q and over a few weeks in Q3. At the beginning of Q4, it seems that momentum just kept stock prices going. 

I guess investors do not want to be left out of this really. Fortunately for us who are already in the market, a large number of investors out there are only entering the game now. The strength of the market last week was completely flow driven. Those that have discovered Philippine stocks simply want to gain exposure. 

It is not surprising that new players have entered our market. Macroeconomics seem to be in our favor with last week's GDP figure coming in at 7.1 percent. This is the strongest 3Q that I've seen for as long as I can remember. In the backdrop of growth rates of other countries in different regions of the world, the Philippine GDP growth rate provides stellar attraction. What gives me further encouragement is the expectation that the strong 3Q GDP growth should propel stronger growth momentum into 4Q which is seasonally our strongest quarter.

The first quarter of 2013 should also see growth well above the norm given that elections will be coming. This country has seen exceptional growth in 4 of the last 5 elections. I am expectant that the 2013 elections will even bring stronger growth than the 8 percent seen the quarter preceding the 2010 elections. What is encouraging about the latest GDP numbers is the strong gains seen in construction. This likely reflects infrastructure spending which government has started to embark on. Of course, private construction remains in full swing judging from the cranes that tower not just the NCR but other regions of the country as well.

Another reason for bright anticipation is the strengthening of the manufacturing sector reflected in the latest GDP. Signs of manufacturing revival have been seen in the Volume of Production Index. While there are many skeptics about manufacturing, I remain hopeful because with domestic consumption comprising over 70 percent of our economy, it makes sense for manufacturing activity to grow in tandem with demand. Anyway, banking and real estate transactions with the manufacturing sector point out that resources are being accumulated in manufacturing.

Where does this leave stock prices? Well, I think there will be a fair amount of profit taking. But rather than view it with anxiety, one should use it as an opportunity for beefing up old positions. It is time to go for growth stocks, and there are quite a few in the market.

Stocks Nearing TP

Sell notice:

AC current price: 510, TP 520
AP current price: 37.5, TP 38
MEG current price: 2.81, TP 2.87

addition to stock list

MPI - cp 4.5, tp 6.5, bbp - 5.65

PSE hits new high of 5,700!

I was able to sell all my positions of SMPH yesterday and am happy to say that I made some money. If you weren't able to sell, don't worry. The price will go back up. The reason SMPH is down now is that alot of people sold their shares. This happens when a TP is hit and the selling off is called "profit-taking". Rest assured, the price will go back up again, so don't sell at any other price than 17!

For our newer investors, suppose you were able to receive a stock dividend of 25% (like me for SMPH) and let's say you had 100 SMPH shares, your number of shares has increased to 125.

To sell all these shares, you first sell all boardlots, i.e. the 100 shares.

You then sell the 25 shares via the odd-lot option in the sell stock options. Please refer to the picture below.

Now, the best thing to do is to reinvest this new-earned money into other stocks that are still below our buy-below-price, but do not buy in 1 go. Divide the cash into 6, and invest it over a period of 6 months. I posted earlier that Philippine stocks might go down because prices are now quite expensive, and the dip in the U.S. market has made U.S. stocks cheaper, thus attracting more foreign investors to transfer their money there.

For more experienced investors, buy when the price hits support levels. For our newer investors, just buy as long as the price is below our buy-below-price, spread out over a time period.

Why do we need to do this? Please refer to the picture below:

Let the X-axis dictate time and the y-axis as price. Over time, prices fluctuate and no one can predict with certainty where prices will go. Thats why we minimize cost by buying over a period of time rather than a 1-time-big-time method.

For example(based from the picture):

Month 1 - stock price P6
Month 2 - P4.5
Month 3 - P3
Month 4 - P4.5
Month 5 - P6
Average: P4.8

You get an average of P4.8, whereas if you buy only 1-time, your purchase might be at expensive levels/resistance levels.

On my next post, we will talk about support and resistance levels and how to draw their lines.

Circle of Competence

When it comes to the stock market, there are just so many stocks to choose from that sometimes, we get overwhelmed in choosing what to buy. Add to this the funny reality of money burning a hole into our pockets...

I must buy something! But what?!?

I don't know if the above holds true for you when my money clears into my brokerage account, but it is true for me.

Based of these, lets try to categorize the type of stocks in the Philippine Stock Market.

First we have the companies known as blue chips. These are the companies listed on the PSE composite index. They are somewhat the leader companies of their sector. There are 30 in all in the PSEi. These stocks are chosen to be in the index due to their stability.

To name a few: Ayala Corp (AC), PLDT (TEL), Aboitiiz Power (AP)

Next are called the 2nd liner stocks. These are stocks that are popular or well-to-do companies that are not part of the Index but are still popular due to the size or profitability of the company.

To name a few: Cebu Pacific (CEB) used to be in the index but was downgraded to 2nd liner, EEI, NICKL

The last grouping of stocks are known as the third-liners. These stocks are what U.S. Brokers would call penny stocks. They're called penny stocks because most of the share prices of these stocks are in centavos.

To name a few: OV, APM

Even after we've grouped them, there are still a lot of stocks to pick from even if we base our choices from the Index alone. The index holds 30 stocks. If you want, you can buy 1 boardlot of each company in the index. But then this would counter what we call as Focus Investing.

Focus investing concentrates our capital on 3 stocks for our portfolio, with 6 being the maximum allowable number.

So how do we pick 3 out of 30? Quite simple. We just follow our circle of competence.

Imagine yourself as the center of a circle. As you go about your day-to-day tasks, you interact with people, commodities, services, etc.

For example, your house uses Veco for electrcity. You buy your groceries from SM, or your house sits at an Ayala developed land.

This is your circle of competence. Investing in what you know.

Peter Lynch of Magellan Fund (the most successful Mutual Fund in U.S. history) discovered Taco Bell because while on a trip in California, he was hungry and saw a Taco Bell stand. So he parked his car and had a snack there.
Warren Buffett bought Fruit of the Loom (company that makes underwear) because he liked the brand and had used it.

From this, observe your circle of competence and buy stocks accordingly.

Do you go on trips using Cebu Pacific?

Do you put your savings into Banco De Oro?

Do you drink San Mig Light or San Mig Coffee 3-in-1?

Is your cellphone network Globe?

Do you like eating in Jollibee?

The Fisherman and the Investment Banker

I read this story from the blog of Fritz Villafuerte.

Here's a link to the story in his website: The Fisherman and the Investment Banker


An American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked.

Inside the small boat were several large yellow fin tuna.

The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

The Mexican replied, “only a little while.”

The American then asked why didn’t he stay out longer and catch more fish?

The Mexican said he had enough to support his family’s immediate needs.

The American then asked, “but what do you do with the rest of your time?”

The Mexican fisherman said, “I sleep late, fish a little, play with my children, take siestas with my wife, Maria, and stroll into the village each evening where I sip wine, and play guitar with my amigos. I have a full and busy life.”

The American scoffed.

“I have an MBA from Harvard, and can help you,” he said. “You should spend more time fishing, and with the proceeds, buy a bigger boat. With the proceeds from the bigger boat, you could buy several boats, and eventually you would have a fleet of fishing boats.”

“Instead of selling your catch to a middle-man, you could sell directly to the processor, eventually opening up your own cannery. You could control the product, processing, and distribution,” the American continued.

“Of course, you would need to leave this small coastal fishing village and move to Mexico City, then Los Angeles, and eventually to New York City, where you will run your expanding enterprise,” the investment banker concluded.

The Mexican fisherman asked, “But, how long will this all take?”

To which the American replied, “Oh, 15 to 20 years or so.”

“But what then?” asked the Mexican.

The American laughed and said, “That’s the best part. When the time is right, you would announce an IPO, and sell your company stock to the public and become very rich. You would make millions!”

“Millions – then what?” asked the fisherman.

The American said, “Then you could retire. Move to a small coastal fishing village where you could sleep late, fish a little, play with your kids, take siestas with your wife, and stroll to the village in the evenings where you could sip wine and play guitar with your amigos.”

- Original Author Unknown

Sell Update: BPI

Our Target Price for BPI has been hit.

Current Price is at P94. RSI levels indicate that the stock is now oversold and is due for correction or a decline in stock price.

Sell now.

Fund Managers buying stocks ahead of Investment-Grade Rating Upgrade

source: http://www.mb.com.ph/articles/382457/fund-managers-buying-stocks-ahead-of-investmentgrade-rating-upgrade#.UK7yuo6AQ-B

by Ian Sayson  of Manila Bulletin

The Philippines’ biggest fund managers are buying more consumer and property stocks as prospects for an investment-grade credit rating and lower borrowing costs drive the benchmark index to a record.

The Philippine Stock Exchange Index (PSEI) jumped 26 percent this year to a high of 5,500.58 Tuesday, driving valuations to 15.5 times estimates for 2013 earnings, the most among 15 Asian- Pacific markets tracked by Bloomberg. The measure is trading at its biggest premium to the MSCI Emerging Markets Index since Aug. 3 as analysts predict a 12 percent increase in the Philippine gauge’s earnings in the next 12 months.

BPI Asset Management Inc.’s Paul Joseph Garcia is buying food and drink manufacturers as the slowest inflation rate in four months gives the central bank room to cut record-low borrowing costs to shelter the economy from the global slowdown. Metropolitan Bank & Trust Co.’s Allan Yu is investing in homebuilders and retailers amid expectations the Philippines will win an investment-grade credit rating as early as 2013.

“We have started to take positions for the coming year,” Garcia, who helps manage about $18.5 billion as senior vice president at BPI Asset, said by phone yesterday. “The Philippines is still expensive relative to other Asia-Pacific markets but that’s the premium you pay for earnings certainty.”

Garcia predicts the Philippine Stock Exchange Index may climb another 18 percent through 2013 to 6,500. The gauge could rise 5.4 percent to 5,800 by the end of this year, said Yu, who helps manage $10.3 billion at Metropolitan Bank, the nation’s second-biggest bank by assets.

Bangko Sentral ng Pilipinas lowered its overnight borrowing rate for the fourth time this year on Oct. 25 after second-quarter economic growth slowed to 5.9 percent from a 6.3 percent pace in the previous three months. President Benigno Aquino is increasing spending and seeking more than $16 billion of investments in roads and airports to spur economic growth as fast as 7 percent in 2013. The Philippine stock index’s increase this year compares with a 13 percent climb by the MSCI Southeast Asia Index and the MSCI Emerging Markets Index’s 7.1 percent advance. The Southeast Asian measure trades for 14.1 times estimated profit, a 25 percent premium to the emerging-market gauge’s multiple of 11.3.

The 10 largest consumer stocks in the 268-member Philippine All-Share Index including Universal Robina Corp. and Pepsi-Cola Products Philippines Inc. have climbed an average 70 percent this year amid prospects of increased consumption, which accounts for 74 percent of the economy. Growth in second-quarter consumer spending accelerated to 5.7 percent from 5.1 percent the previous three months, government data show.

Stock Update as of Nov. 17, 2012

Stock Update:

legend:

CP - current price
BBP - buy below price
TP - target price

Ayala Corp (AC) - cp 449.8, tp - 520, bbp - 452

Banco De Oro (BDO) - cp 68, tp - 86, bbp - 75

Aboitiz Power (AP) - cp 34.35, tp - 38, bbp - 33 *stop buying for now.

EEI Corporation (EEI) - cp 8.9, tp - 10, bbp - 8.7 *hold from accumulating. if TP is hit, do not sell just yet.
-caught my interest due to steady growth of EPS by 15% every year. Construction sector will also benefit largely from continued boom in construction as well as a lot of PPP projects lined up for 2013.

Bank of Philippine Islands (BPI) - cp 85, tp - 91, bbp - 79 *stop buying for now.

First Philippine Holdings (FPH) - cp 91.8, tp - 110, bbp - 96

JG Summit (JGS) - cp 34, tp - 40, bbp - 34.8 *slow gainer

Metrobank (MBT) - cp 95.25, tp - 120, bbp - 104

Megaworld Corp (MEG) - cp 2.47, tp - 2.87, bbp - 2.5

SM Prime Holdings (SMPH) - cp 14.48, tp - 17, bbp - 14.79

Caveat Emptor!

IMF lauds PH growth amid global slowdown

MANILA, Philippines - The Philippines faces bright economic prospects despite the global slowdown, visiting International Monetary Fund (IMF) Managing Director Christine Lagarde said yesterday.

“You will be interested to know that this year, 2012, at a very difficult time because of the financial crisis in other parts of the world, the Philippines is probably the only country of which we have increased the growth forecast as opposed to other places in the world where we decreased our forecast,” Lagarde said in a press briefing. The Philippines was the last leg of the IMF chief’s Asian tour.

Malacañang had to cancel her scheduled courtesy call yesterday because President Aquino was down with flu. Vice President Jejomar Binay received her instead at his office at the Coconut Palace in Pasay City.

In yesterday’s press briefing, Lagarde said the IMF now sees the Philippine economy growing “in excess of five percent” this year and “in the range of five percent” next year or higher than the 4.8 percent forecast for both years under the institution’s latest World Economic Outlook released last month.

The success of governments in providing jobs and livelihood to citizens depends on economic growth.

The IMF’s upgraded forecast, as bared by Lagarde, meets the lower-end of the Aquino administration’s five-to six percent growth target for this year. As of first semester however, the local economy has already breached the target at 6.1 percent.

Lagarde also congratulated the country’s economic managers for their “excellent economic stewardship” which had enabled the local economy to post an average of five percent growth over the past decade.

She also cited the “excellent policy mix” employed by the Department of Finance, which is in charge of raising state revenues, and by the Bangko Sentral ng Pilipinas, which sees to it that prices of basic goods and services remain stable.

She acknowledged, however, that much remains to be done to ensure that growth is inclusive, maintaining that about 42 percent of the population can still be considered “poor” as they live with less than $2 a day or roughly P80.

“All the efforts including the cash transfer program under your stewardship are trying to reduce the inequalities that clearly hamper sustainable growth in the long term,” she said, referring to the P1,200 conditional cash allowance for poor families. 

Lagarde also expressed support for the “sin tax” bill, certified as urgent last Thursday by President Aquino.

The measure, which she called a “great progress for the revenue collection of the country,” would be voted upon on Monday at the Senate. It aims to raise up to P45 billion from adjusted tobacco and liquor taxes.

“So, let’s hope that this bill would be voted on Monday and that tax collections would result from this piece of legislation,” she added. The Philippines had already settled all its IMF debts in 2006.

“The IMF is very pleased for the historical partnership that we have had, particularly pleased that it has taken in the form of a creditor relationship and one where clearly we will be doing everything we can to support with technical assistance the effort of Philippine authorities to expand growth throughout the country,” she said.

Lagarde’s Asian tour was meant to draw insights from the region’s policymakers to help the institution solve the four-year-old debt crisis in Europe. Asia itself had to deal with a financial crisis in 1997.

In her meeting with Binay, Lagarde also expressed her gratitude for the country’s $1-billion contribution to the IMF last June.

“The contribution helped ensure global and regional financial stability amid the crisis in Europe,” a statement from the Office of the Vice President quoted Lagarde as telling Binay.

She also told Binay that the country’s change in status from being a borrower to a creditor nation is “a big shift.”

“To see your country come up with a contribution on World Bank loans at a time when the economic crisis is not here but in Europe in particular was real,” Lagarde said.

“It was not so much the money, it was the signal that you gave,” she pointed out.

Lagarde said it was now the European countries that have become the borrowers, with Ireland, Portugal and Greece being the IMF’s largest beneficiaries.

For his part, Binay expressed hope that Europe would soon overcome its financial crisis.

source: http://ph.news.yahoo.com/imf-lauds-phl-growth-amid-global-slowdown-160409766.html

New SEC ruling on foreign ownership limited

GLO, TEL, MWC, ICT, ALI and media companies to be the most affected by SEC’s draft rules on foreign ownership

SEC: Foreign ownership limit to be imposed on each class of shares. On November 5, the Security and Exchange Commission (SEC) released its draft rules and guidelines on foreign ownership. The two most important items from the rules were that 1.) the SEC will require all covered corporations to observe the 40% foreign ownership restrictions for each class of shares, given that these classes of shares have different rights, privileges and limitations; and 2.) all companies in violation of this ownership restriction are given a maximum of five years to comply.

GLO, TEL, MWC, ICT and ALI to be the most negatively affected. Listed companies that are in violation of the foreign ownership limit based on the stricter definition of the SEC are TEL, GLO, MWC, ALI and ICT. Share price performance of the five stocks would most likely be negatively affected by this development. If the SEC upholds the draft, the five companies would either have to force foreign shareholders to sell down shares to local investors or issue new common shares to local investors, leading to dilution. The value of shares that will have to change hands or raised is also significant and could be a challenge (see exhibit 1 for details). Assuming that all five companies choose to sell existing shares held by foreigners to local investors, local investors would have to absorb Php160 Bil worth of shares. On the other hand, assuming that all five companies issue new common shares to local investors, the amount of capital to be raised is Php400 Bil. Foreign investors would also not be allowed to buy shares of the five companies and this would negatively affect the liquidity of the stocks.

Media companies to also be negatively affected as PDRs to be subject to foreign ownership limits. Issuing Philippine Depository Receipts (PDRs) to address foreign ownership limit might not be allowed as the draft rules state that depositary receipts are “subject to the ownership restrictions prescribed by the Constitution”. Note that PDRs are derivative instruments that only receive the economic benefit of the underlying common share. Owners of PDRs do not have voting rights, and as such, PDRs were not included in the computation of foreign ownership in the past. Recall that foreign ownership is not allowed in media companies, and ABS and GMA issued PDRs in the past to allow foreigners to indirectly invest in their stock. However, under the new rules, PDRs will also be subject to foreign ownership limits. As such, foreign investors who own PDRs of ABS and GMA will also have to sell them to local investors. The value of PDRs that will have to be sold down is Php8.8 Bil.

Companies to most likely engage in a discussion with the SEC. We would like to stress that these are just draft rules and still subject to change. Although we have yet to receive any comments from potentially non-compliant companies, we believe that these companies would most likely engage in a discussion with the SEC given the potentially adverse impact of the proposed rules on foreign ownership limit on the market and on their shares.

Stock Watch: PIP

Pepsi-cola Product Phils., Inc. (PIP)

According to the Consolidated - Non-Audited financial statement for the first quarter of 2012, total net operating revenues increased with 10.08%, from PHP 4,081,962 thousands to PHP 4,493,234 thousands. Operating result increased from PHP 150,243 thousands to PHP 315,975 thousands which means 110.31% change. The results of the period increased 97.17% reaching PHP 224,849 thousands at the end of the period against PHP 114,038 thousands last year. Return on equity (Net income/Total equity) went from 2.02% to 3.65%, the Return On Asset (Net income / Total Asset) went from 1.28% to 2.07% and the Net Profit Margin (Net Income/Net Sales) went from 2.79% to 5.00% when compared to the same period of last year. The Debt to Equity Ratio (Total Liabilities/Equity) was 75.79% compared to 57.95% of last year. Finally, the Current Ratio (Current Assets/Current Liabilities) went from 1.02 to 0.83 when compared to the previous year.

CP: 5.4
TP: 6.4
BBP: 5.6

Last trading day shows a doji pattern. DMI indicates an upward trend with the ADX at 69, +DI at 44, -DI at 2.25. Based on the 1 month pattern, PIP could currently be on its 5th elliot wave, so a correction is very possible in the next week.

Strategy: Wait for results of 1st trading half day. If stock begins to correct, buy on dips/below 5.4. If not, buy below 5.6.

Stock Update as of October 31, 2012

AC cp - 440, bbp - 452, tp - 520

AP cp - 33, bbp - 33.21, tp - 38.19 note: Future Value (FV) estimates have been raised

BPI cp - 83.1, bbp - 79.13, tp - 91 note: stop buying for now.

FPH cp - 85, bbp - 96.19, tp - 110.62 note: currently on breakout from resistance of 80

JGS cp - 33.05, bbp - 34.78, tp - 40 note: slow mover

MBT cp - 93, bbp - 104.35, tp - 120

MEG cp - 2.42, bbp - 2.5, tp - 2.87 note: slow mover

SMPH cp - 14.3, bbp - 14.78, tp - 17

Caveat Emptor!

Technical Spotlight: Some Key Stocks and Trend Calls

SM Prime Holdings

9M12 earnings poised to beat forecast

9M12 income grows 15.4%. SM Prime’s 3Q12 net income grew 15.9% y/y, faster than the 15.3% growth registered in 9M12. This brought net income for the first half to Php7.4 Bil, 15.5% higher than a year ago. The said amount is also equivalent to 72.9% and 71.8% of COL and consensus full year estimates. Last year, net income for the first nine months accounted for just 70.8% of full year earnings. Earnings momentum of SMPH remains strong going into 4Q12, putting it in position to beat full-year estimates.

Revenues jump for both Philippine and China operations. For the first nine months of 2012, revenues from Philippine malls jumped 13.7% to Php20.2 Bil. This was driven by the strong growth in same store sales (SSS) and the first full period contribution of malls opened last year. SSS growth reached 8%, faster than the 7% growth recorded last year. Management also expects SSS growth to remain strong going forward (between 7% to 8%) as domestic consumer spending remains robust. SMPH also benefited from the first full period contribution of the 380,000sqm of GFA added to its Philippine mall operations last year. This is equivalent to 7.6% of its end 2010 GFA.

Revenues from SMPH’s Chinese operations were also strong, growing by 27% to Php1.9 Bil as both rental rates and occupancy levels improved. China currently accounts for around 9% of total revenues.

Five malls added in the Philippines, one to open in China. SM Prime has completed all the local malls in their pipeline this year. This year they opened five malls with a total GFA of 430,838sqm. This added 9% to SMPH’s mall GFA in the Philippines to a total of 5.5 Mil sqm. For its China expansion, SMPH will open their 150,000-sqm Chongqing mall in December. This will bring SMPH’s GFA in China to 795,172 sqm by the end of this year.

Reiterate BUY with FV estimate of Php17.00.  BUY rating on SMPH with a fair value estimate of Php17.00 is reiterated. We continue to like SMPH for being a major beneficiary of the favorable outlook for consumer spending in the country. We forecast revenues to increase at a CAGR of 13.7% from FY12 to FY14, and net income to increase at a CAGR of 12.5%. Although SMPH trades at a FY13E P/E of 21.8X, a slight premium compared to the 19.4X average FY13E P/E of other local consumer plays (JFC, PGOLD and URC), we believe the premium is warranted. Unlike other consumer plays, SMPH is resilient to fluctuations in commodity prices. Cash flow generation is also more stable, with the company consistently delivering earnings growth during the past 18 years.

Opening an account with an online broker (Citiseconline)

Steps in being able to use an online broker (I'll use Citiseconline because this is what I use, and what I have experience in but feel free to try others. There's First Metro Sec and BPItrade.)

*edit: For people living in Cebu, First Metro Sec has an office beside Metrobank - Fuente. All you need to do is open a savings account with Metrobank (minimum balance I think is P2,000.). Ask them where Norman Go is or just ask them where the office for First Metro Sec is and apply there.

1. Get Electronic banking to be able to fund your Citiseconline (COL) account.

2. Once approved by the bank (usually takes 3-5 working days if sa BDO), download and print the forms from here: COL Forms

Print out and fill-up the following: Individual CAIF, Trading Agreement, Signature Cards (2 copies)

*make sure nga ang email address you will put is your main one. They will call you and also send an email once approved na imo account.

3. Prepare 1 photocopy of a valid Philippines Government issued ID (driver's license, passport, SSS)

4. Prepare a recent billing statement (ako migo, since wala siya iya own billing statement, used sa iyang mama. As long as same address with your gov't. ID) because dili man ta maka personal appearance ngadto.

5. Send these documents via courier to the following address:

CitisecOnline.com Inc. Business Center 2403-B East Tower, Philippine Stock Exchange Centre Exchange Road, Ortigas Center Pasig City, Philippines 1605

6. Once sent, wait for 3-5 days. They will call AND send you an email if approved naka. They will then give you your account number. This is what you use to fund your COL account.

Payment via online banking:

1. Bank of the Philippine Islands (BPI)

Enrollment Process:

1. Log on to www.bpiexpressonline.com

2. Enter your username and password

3. Under Payments & Reloading, click Bills Payments, click Enroll all other Bills

4. Enter your BPI account number and Joint Account Indicator No.

5. Under Bill information, select CITISECONLINE.COM INC. (COL) or COL FINANCIAL GROUP, INC.(I think ila gi change, so check lang) as the enrollee merchant

6. Enter your CitisecOnline account number (8-digit code username) on the space under Reference Number

7. Click Submit

Payment Process:

1. Under Payments & Reloading, click Bills Payment, click Pay Bills Today

2. Under Pay, choose your CitisecOnline Account

3. Enter the amount

4. Choose a BPI account from where payment will come from

5. Click Submit

* You should receive a confirmation email from BPI if payment was successful.

2. Banco de Oro (BDO)

Enrollment Process:

1. Login to www.mybdo.com.ph

2. Click the Add Company/Biller icon

3. Fill-out the Enrollment Details and choose the Channels or electronic banking services where you may want to pay your bills in the future. Click Submit.

4. Click OK when the confirmation dialogue box appears

Payment Process:

1. Click the Pay Bills icon

2. Fill-out the Payment Details, choose your Payment Schedule, click Submit.

3. Click OK when the confirmation dialogue box appears

* You should receive a confirmation email from BDO if payment was successful.

3. Metrobank

No enrollment needed.

Payment Process:

1. Login to www.metrobank.com.ph

2. Under eBanking Solutions, click Pay Bills

3. Under Special bill, select CITISECONLINE.COM, INC or COL FINANCIAL GROUP, INC.(I think ila gi change, so check lang)

4. Enter your COL account number under Subscriber/Account Number

5. Enter your Phone No.

6. Choose the Metrobank account from which the payment will come from

7. Enter the amount

8. Select Immediate Payment

You should receive a confirmation email from Metrobank if payment was successful.

Once you have funded your account, you will receive an email from COL with your account number and your temporary password.

You can now enter citiseconline.com/ citiseconline.com.ph/ colfinancial.com

Here are the stocks I recommend for those starting out:

legend:
Buy Below Price - BBP
Target Price - TP
Current Price - CP

AP - BBP P33.21, TP 38.19, CP 33.4
FPH - BBP 80, TP 102.43, CP 79
MBT - BBP 104.35, TP 120, CP 94
MEG - BBP 2.50, TP 2.87, CP2.47
SMPH - BBP 14.78, TP 17, CP 14.26
BDO - BBP 75, TP 86.5, CP 63.5

How does this work? Lets take for example, MBT (MetroBank). As long as the current price is still below the Buy Below Price(BBP), we will continue to buy that stock. If it reaches the BBP, we stop buying, and just wait until our Target Price(TP) is reached. Once ma reach na ang TP, we sell that stock, and lock in our earnings.

What are the advantages to these stocks compared to penny stocks (very volatile, fast-moving stocks: higher risk-higher gain), if you are like me nga nag trabaho and doesnt have the time to stare at my computer screen to monitor my stocks, then this is the best way to go.

I am currently using Citiseconline.com(COL) as my online broker. Very nice and user friendly siya and you make all the decisions yourself. Compared to broker companies, gamay ra ang service charge per transaction sa COL.

For those nga starting out pa lang, I recommend getting electronic banking sa imo bank account. Ako BDO man ko, I just print and fill out a form found in their website that allows me to do electronic banking.

Whats so nice about electronic banking is this: I work from Monday to Saturday. Wala najud ko time to pay my bills sa credit card, etc. So I do it all online. Sure, naa risk of hackers, but just make sure nga the email you register is secure (I recommend gmail), unya your password is a combination of alpha-numeric characters. For example: instead of password, I would change it to p4ssw0rd.

Once you have electronic banking (registration lasts 3-5 working days), go to www.citiseconline.com and read their Easy Investment Program(EIP)...mao ni akoa karon.

To open a Regular account you need to fund P25,000 for your account. For EIP you only need P5,000 to fund your account to start. After the initial funding, ikaw na bahala how much you want to fund your account. I dont know how much ang minimum, pero naka try nako ug fund ug P1,000 kay na short ko.

Ang maayo ani nga method is this, of the recommended stocks posted, choose 3. Ayaw ug try to buy all, because if like me, gamay ra atoh i-deposit, gamay ra atoh ma palit. Hinay2x lang jud ta. My current 3 are MBT, SMPH, and MEG. Of course, if masdaghan paka ug capital, then feel free to invest as many number of the recommended stocks.

I add to my deposit every month 5,000. Do not try to match the number of stocks for every stock (e.g. 500 shares of MBT, 500 shares of SMPH, 500 shares of MEG)

You match the peso amount invested in each. For example, pag January, I invested P5,000 into MBT. Pag february ako gi butang ako new-earned P5,000 into SMPH. March - MEG. April, MBT nasad and so on and so forth until mu reach ang buy below price. If ma reach na gani ang BBP sa MBT, I switch to lets say CEB (cebu pacific).

Very important: Kailangan jud ug discipline ani...Pagsugod pa lang nako, sayop nako is this...Hots kaayo ko unya na suya jud ko sa mga uban penny stocks, so invest2x ko adto. Lost P4,000. Stick to blue-chip stocks, set your BBP and TP and you will be fine.

Do not worry if the Philippine Stock Exchange(PSE) goes up or goes down. Bisan pa sa time ni Marco and Martial Law, sigi ra japon inching upwards ang PSE.

For 2012, the PSE reached an all-time record high of 5,400. The Philippines' GDP grew by 6.4% at the first quarter, which makes us the 2nd fastest growing economy in Asia (with China being no. 1).

Even if mag gubat ta sa China, invest anyway. Even if pila ka typhoon mu agi, invest anyway. Why? because these giant companies will continue to operate. And they need capital to expand their business. We are just hitching a ride on the big blue whale.

This is now your money working for you.

How does the stock market work?

Time to focus now sa investing and how the stock market works. I'll borrow material from Bo Sanchez, because nindot unya simple iya explanation for it:

When I was eight years old, I learned that my parents invested in the stock market. I overheard them say that they owned shares of San Miguel. (My father worked for San Miguel Corporation for most of his life.)

I asked my father, “What do you mean by stocks, dad?”

He said, “If I bought a few shares of stock of San Miguel, that means I own a tiny part of San Miguel.”

“Wow,” I gushed, “if you own a part of San Miguel, does that mean they’ll give us free Magnolia ice cream and Coke?” (at that time, San Miguel also owned both companies.)

Dad shook his head. “No. It means if San Miguel earns money, they’ll give me a tiny part of their profits. They call them dividends.”

“Oh, I see.”

Actually, it was as clear as mud to me.
Dad looked at my face and knew I was lost. So he gave me an example. “let’s say your mother puts up a small candy store in
front of our house...” “But dad, Mommy doesn’t like candies. She loves 
chocolates.”

Dad rolled up his eyes. “this is just an example!”

“Then make it realistic. let her open a chocolate store.”

“Okay! Mommy needs P50 to buy the chocolates and another P50 to buy a small table for the store. So she needs a total of P100. But let’s say she doesn’t have p100. let’s say she only has P90. So she walks up to you and asks, “Bo, can you give me p10? In return, you’ll own 10 percent of my candy store...”
“Chocolate store,” I frowned.

“OK, chocolate store. So you give Mommy your P10. At the end of the year, the chocolate store earns a nice profit of P10. So Mommy decides to share with you P1, since you own 10 percent of the store. that P1 is what you call your dividend.”

“That’s great. So you’re earning dividends from San Miguel, dad?”


“Yes, but that’s just one way of earning. the other way is through capital appreciation.”

“Capital what?”

The Company Gets Bigger

“Let’s go back to Mommy’s chocolate store. do you remember how much was the store worth?”
“No.” “how much did she need to buy all the stuff?”

“P100.”

“Yes. that’s how much Mommy spent to buy the 
chocolates and the table. But after a year, business was so good, she decided to sell biscuits too. From the profits of the business, she bought an entire pack of biscuits worth P50. She also bought a second table for another P50. So Bo, how much is the store now?”“P200.”

“And how much percent do you own?”

“I own 10 percent of the store.”

“That’s right. one day, your sister says, ‘Bo, I want to buy your ownership of Mommy’s chocolate store.’ What will you say?”

I crossed my arms and pouted. "I'll tell her it's not for sale.”
“But if you wanted to sell it, how much should she pay you?”
“Ten percent of P200 is P20?” I flashed a smile, “Hey, I earned P10...”
“That’s capital appreciation. You pick up fast. But that’s not all...”
The Company Has More Potential
“You know how your sisters like to buy the same shoes and clothes? Let’s say your other four sisters want to also be a part-owner of Mommy’s chocolate store. Because they believe that the chocolate store will spread to 100 branches all over the world. they foresee Mom opening stores in Paris, New York, Moscow, Tokyo... So they go to you and beg you to sell them your 10 percent share. What will you do?”
“I don’t know.”

“Think.”

“I guess they’ll gang up on me, twist my arm, pinch my ear, and whoever causes the most pain wins.”
Dad rolled up his eyes to the ceiling again. “Bo, imagine if all your sisters are kneeling down in front of you, asking, ‘C’mon Bo, sell me your 10 percent ownership! please! pleeeeeeaaaaase!’”

That was my lightbulb moment. I got it.

“Hey, I won’t sell it for P20,” I said, “Since they’re fighting over it, I’ll sell it for P30. Or P40. Or even P50! I’ll sell it for P100. plus, whoever buys it from me must be my slave for the next five years.”

Dad chuckled. “So you realize that the price of the stock is determined by two things: Real Value and perceived Value. Real value means the cost of the store — how much are the chocolates and tables. perceived value means how much are people willing to buy it. Perceived value is based on potential. perceived value is based on demand.”

On Savings

So, ngano di manko mu prefer to put my savings inside the bank?

Lets say you have P1 million sa banko. If you keep your money in a time deposit account for 36 years, ang P1 million will become P4 million.

If you put that very same P1 million into recommended stocks (I'll post them here for free), for the same 36 years, ang imo P1 million will become P64 million. Large difference, diba?

Now the question is: How does one save?

Sa una, ako buhaton was 
1.) pay all my bills
2.) spend on my needs and wants
3.) whatever is left, put into savings.

Of course, after numbers 1 and 2, wala najud mabilin sa ako savings. And dira ko na sayop. Angay unta is this:
1.) Savings
2.) Bills and needs
3.) Wants

Lisod jud ni siya at first, mao nang you really need discipline. A good percentage of savings is 20%-30% of your net income(i.e. after SSS, witholding tax, pag-ibig, philhealth). The rest, kaw na bahala ana. Currently, mao ni ako setup:
30% savings/retirement fund
10% emergency fund(butang lang sa bdo savings account, ayaw jud ni hilabti except for emergencies!)
60% for bills, dates, walks, clothes, gas

Investing in the PSE

I wanted to start this thread because I wanted to  share on what I have learned with regards to getting financial freedom. I am 29 yrs. old on2012, and I regretted as to why I did not get the initiative to start saving or planning for my early retirement(more wealth to help others?....hehe  ). 

Hopefully, in this thread, I hope to motivate younger Filipinos on the values of becoming financially literate.

So on my first post with regards to Financial Health, I will be sharing about investing in the Philippine stock market, and it isn't good to just put money in your bank. I'm still writing down my material to have a nice format,  but here's the main point.

Every year, inflation(cost of commodities: oil, food, clothes, gas, electricty) rises on an average of 7%.

If you put your money on a savings account, your interest gain per year is only 3%.

If you put your money in a time deposit, interest gain per year is 5%.

If you put your money in the stock market, and in giant-solid companies (like SM, Ayala, Cebu Pacific), it is already proven that interest gain per year is at least 11%. And computation for compounded interest is not yet included.

There is a huge difference and you still beat inflation!

More to come...