Mania: Record Churning at the PSE as Two Speculative Issues Take the Limelight! Mania Across the World as Economic Indicators Turn South!

Mania: Record Churning at the PSE as Two Speculative Issues Take the Limelight! Mania Across the World as Economic Indicators Turn South!

Mania has engulfed the Philippine Stock Exchange as I wrote two weeks ago.

See Mania at Phisix 8,050! Beware of the January Effect, Will 4Q GDP Be Lower Than the 3Q?, January 20, 2019

Figure 1

Well, the average daily trades have hit a fresh high even when the PSYei has only been at 8,150! The previous high occurred in February 23rd just as the Phisix began to retrace after it reached a landmark of 9,058.62 on January 29, 2018.

Market participants just dropped their guards and went on a buying berserk with the greater intensity than when the PSYei was in 8,500-8,700 in February 2018. It is a sign of greed powered actions.

And like in 2018, the striking part for this fresh high in trade churning has been two third-tier issues taking up the market’s attention!

Two companies, Premier Horizon Alliance (PHA), a Php 3 billion market cap company and Greenergy Holdings Incorporated a Php 5 billion market cap company (as of February 1) saw their volume soar to within the top 10 most traded issues of the last two trading days of the week.

PHA prices rocketed 54.29% this week for a 2019 return of a breathtaking +398% advance.

GREEN on the other hand, soared 35.8% this week to rack up 48.77% gains in 2019.

PSE participants chasing Free money!

Figure 2

PHA was the most traded issue, to beat blue chips, on January 24th and the 28th and was in the top 10 ranking in all trading sessions since January 23rd. It was the 14th most traded last Friday. PHA had been one of the most traded along with the heavy market caps in EIGHT straight sessions! A 1-billion mark cap beat heavy caps to reach 3-billion in just a few days!

GREEN was the second most traded issue on January 31 and took the seventh spot on Friday, February 1st.

Back in Jan-Feb 2018, the crowd darlings were the speculated participants for the third telco player: NOW, MRC, TBGI and ECP.

Today the story has shifted to injections of investments funds from foreign funds into these third-tier firms.

Of course, such mania has been helped by massive marking the close pumps.

But the Mania has been apparent worldwide.

Figure 3

It was the “Best January for Global Equities since 1987” according to Pension Partner’s Charlie Bilello.

And such mania has been occurring as major economic indicators of global economies have been turning sharply south!

Figure 4

The declines of the World manufacturing PMI, China’s import volume, Eurozone and China’s PMI and Emerging Market PMI and Industrial Production have only accelerated.

Will the central bank (Powell, Draghi, Kuroda and the Yi) PUT be enough to reverse their fortunes?

Will it be enough to calm the political mayhem occurring across the globe?

Expect the unexpected.