``When a thing is done, it's done. Don't look back. Look forward to your next objective.” -General George Marshall, Chief of Staff, US Army
This had been a remarkable week for the Philippine financial markets. Not only seen with the magnificent performance of the Philippine Composite benchmark, the Phisix, but also of the Philippine Peso and the domestic bond instruments.
First, Philippine bonds significantly outperformed its peers to bring down coupon yields in both Peso and dollar based debt instruments to March 2006 levels. This comes as the national government recently announced of its plan to swap its short-term dollar instruments with longer dated issues. The government aims to lengthen its debt maturity profile and to take advantage of favorable market conditions into lowering of its financing costs.
Second, the Philippine currency continued to outshine the region as it surged to a fresh four year high milestone at 50.25 last Wednesday, but closed at 50.49 to a US dollar or .48% higher over the week. Economic growth and portfolio inflows had been attributed to its recent activities, according to Bloomberg’s Clarissa Tan, ``The Philippine economy grew the most in the second quarter in a year, while growth in exports was the quickest in six years. Money from abroad flowing into the nation's stocks helped push the benchmark share index to its highest close this week in more than three months.”
Third, the Phisix was the second best performer in the region up 2.09% following Vietnam’s outstanding 2.98% advance over the week in a rather mixed region. While foreign money, as usual, shored up the domestic bellwether, the intensity of the inflows had been seen mostly diffused throughout index component issues. Issues with over 50million pesos worth of inflows reached the same levels as the Phisix peaked last May or prior to the most recent global selloff, while the positive spread between the inflows and the outflows likewise reached a level seen during the euphoric phase during the second quarter.
Figure 1: Daily Wealth/Stockcharts.com: Large Caps Outperforming
Put bluntly, foreign money appears to have concentrated their accumulation activities not limited to select issues but towards broad-based large market cap Phisix component issues. The shift towards large cap investing could be seen as possible defensive tactical maneuvers which seemingly validates the outlook of a possible moderation of economic growth in the global economy. As shown in Figure 1, the trend towards large caps investing could be a global one as depicted with parallel developments in Wall Street.
More importantly, this week’s buoyant activities comes in the face of a decline in the US equity markets which had been strongly correlated to the world markets, as well as the Phisix, since the second quarter of the year. This seemingly unique divergence, while not to be construed yet as a definitive trend, as one week does not a trend make, could possibly presage on the future outlook for the Phisix. The resiliency of last week’s gains could probably be tested by another bout of global “risk-aversion” activities. 
1 comment:
Hey, Benson!
Cat got your tongue? Did you pull out your other blog? The one which includes your thrashing of Apex, the "cabal" and the "sage"?
I was hoping you'd respond to my comments. Why don't you? Here are a few more.
The chart you showed was annotated to show "first attempt". Did that occur in the month of May? If yes, then you better clarify to your subscribers that May was when the price of gold and other metals peaked. Apex and other mining stocks were just following the trajectory of gold at the time. When gold crashed soon after, Apex did too and not because it was dumped. Other mining stocks fell as well and whereas Apex has recovered, the likes of Philex, Lepanto, and Atlas have not.
And don't go comparing Apex to BW. BW was a fraud from the start. It had nothing. In contrast, Apex has been shown to have gold underneath its property. It's a matter of time before it's extracted.
Before you make sweeping accusations, be sure you can back it up with real evidence. Why don't you go to Compostela Valley for example? You seem to have the means to do so. See the mine for yourself. Try talking to representatives from Crew Gold.
Did you read about the Jesse vein? I know this came out after you wrote that blog but this is important. One of the drilling results came out like this: 156 grams Au per ton and 1588 grams Ag per ton of ore. Apex is not just hype. It's the real thing.
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