Question of recovery
DEN SOMERA
We’re now on the 18th week of the virtual stock trading challenge with the market’s direction still seemingly unclear following its terrible drop to 6,986.88 last Monday. The fall practically pulled down the PSEi to an 18-month low and into the bear market.
However, the PSEi managed to recover the following day at 7,007.21 and register a small gain of 20.33 points or 0.29 percent.
Surprisingly, foreign investors ended as net buyers. They had more buying than selling transactions and interestingly generated 51.81 percent of total market transactions, though, on a rather low value turnover of P5.92 billion.
On Wednesday, the market climbed higher. It increased the rate of its advance by 168.22 points or 2.41 percent more and settled at 7,176.43. Total value turnover was higher this time by 9.80 percent at P6.50 billion.
Punting by local investors appeared to have spurred the market’s advance. This came about as foreign investors’ trading participation to overall market transactions slightly dropped to 51.55 percent and negated the impact of their trading activities as net sellers for the day. The latest reports from the international rating firms like S&P Global and Moody’s Analytics that upgraded the country’s financial rating status may have given added impetus to investors’ general confidence to buy into the market.
In the market’s present weakness, however, local and foreign investors were both quick on bargain prices and profit-taking that the market failed to advance on Thursday.
Foreign investors again turned to be net sellers, too, and their market participation also went up to 52.55 percent of total market transactions. This surely weighed on the market’s direction to head south and to close lower at 7,066.57 with a day’s loss of 109.86 points or 1.53 percent.
On Friday, though, the market bounced back by 127.11 points or 1.80 percent and closed at 7,193.68, that in turn gave the market a weekly gain of 130.48 points or 1.85 percent.
Last Friday also marked the end of the first semester and analysts were quick to add that the market’s higher close was also brought about by the window dressing efforts of parties who still believe there are more good things to expect from the market.
Does this mean then that the market is on its way to recovery? The answer should be known next week or so.
In the game
Below are the overall trading results of the players of the virtual stock trading challenge for Week 17 and week ending June 29, 2018.
Still in first place is Pixiu whose performance for the period was pulled down by the absence of trading activity in Philippine H2O Ventures Corp. last Friday.
If you’ve missed the news, H2O has been taken over by Udenna Corporation controlled by the rising taipan Dennis A. Uy and will have a new corporate name reflective of its new mandate.
As you will see in the table, on the other hand, she has finally succeeded in selling both of her long-held stocks East West Banking Corporation (EW) and Shang Properties, Inc. (SHNG) – but on a loss, which will further explain her lower return on investment standing for the period.
(See Table 1)
HRB 2015, meanwhile, has remained without a new trade but is now in second place with his simple strategy of maintaining a large cache of cash equivalent to 79.80 percent of capital and a small exposure in a stable bluechip under the market’s continuing downward trend.
(See Table 2)
Play Hard is now in third place. His foiled attempt to liquify his stock positions for the period has likewise denied him a war chest to shop around for new stock positions.
(See Table 3)
Dondee Prime attempted to bolster his investment portfolio with the acquisition of information and communications technology firm Xurpas, Inc. and purchase of additional shares of PLDT, Inc. (TEL). Unfortunately, his posted prices were just too low for the day’s prices of the stocks.
(See Table 4)
Finally, Small Time Trader has disposed his stockholdings in Oriental Petroleum & Minerals Corporation (OPM). Trading activity in oil-related companies have subsided with the stabilization in the world oil price. His next steps to rebalance his investment portfolio should determine his future performance standing.
(See Table 5)
St. Michael is like HRB 2015 who hasn’t made any additional trading move since his first entry in the market. This has rendered the profitability and his performance standing to fall as the market continued to drop.
(See Table 6)
Dud67 remained trapped in a big quagmire of soft prices and speculative corporate storylines. However, as anything remotely possible can still happen in the market, he’s not entirely out of the game with his performance of 63.81 percent ROI.
(See Table 7)
Bottom line
Readers complain they seemed to haven’t learned enough from the game should it end soon. It’s requested that it should be extended by at least another month to also capture part of the vagaries that also challenge the fortunes of investors toward the end of the year. Watch out for the decision next week.
Den Somera is a licensed stockbroker. The article has been prepared for general circulation for the reading public and must not be construed as an offer, or solicitation of an offer to buy or sell any securities or financial instruments whether referred to herein or otherwise. Moreover, the public should be aware that the writer or any investing arties mentioned in the column may have a conflict of interest that could affect the objectivity of their reported or mentioned investment activity. E-mail address of the writer is den.somera@manilatimes.net
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