THE past month and a half has been a roller-coaster ride for the Philippines and a period that will be noted and talked about for years to come.
We ended 2014 with perhaps the most holiday filled two weeks in history of the country. The first week of January kicked off with over 5 million people participating in the Procession of the Black Nazarene in Manila, bringing section of the city to a virtual standstill.
Meanwhile, preparations were in full swing for the arrival of Pope Francis causing both excited anticipation and traffic jams. On January 15th, the Papal visit began, and while this was a momentous event, no one could anticipate what the next few days would bring.
The official greeting at Malacañang gave people some insight into the personality of Pope Francis, watching him almost eagerly interacting with the employees of the palace and invited dignitaries in a somewhat unexpected intimate fashion.
His trip to the Tacloban area to visit with typhoon victims was cut short because of an approaching typhoon. The irony was unmistakable. Further, the homilies he delivered both at the Tacloban Mass and at the University of Santo Tomas were both nearly completely off-script from his prepared remarks. He instead spoke extemporaneously with words and an attitude that directly touched millions of Filipinos who were glued to their television sets.
While still basking in the glow of the Papal visit and ready to get back to business as usual, the last week of January saw the deaths of 44 members of the Special Action Force of the Philippine National Police.
And as January moved into February, the government released the fourth quarter and year end gross domestic product growth that stunned most of the experts coming in well above expectations for the quarter and above some estimates for the full year.
January 2015 was a month for the history books.
While all of this was happening, the Philippine stock market was booming higher. From the last pre-holiday day of stock market trading—December 19th—through January 30th, the Philippine Composite Index (PSEi) gained 565 points or 7.9 percent.
The 6.35 percent PSEi increase in the calendar month of January is not unusual. Price increases of this magnitude were similar in February 2014 as well as during January, February, and October of 2013 and January 2012. The largest most recent one-month gain occurred in September 2010 when the PSEi rose 15 percent. However, do not entertain the idea that the increase in the price of local stocks was because of all that cheaply borrowed foreign money. The net foreign selling for the month of January 2015 on the Philippine Stock Exchange (PSE) was P23.6B.
My personal involvement in the PSE started before there was a PSE. Back then, we had the Makati and Manila Stock Exchanges. Many things have changed through the years but some things have stayed the same.
We still have two redundant trading floors and by the time the PSE unifies the floors in one building, online trading has made the trading floor obsolete. The London Stock Exchange has not had a genuine trading floor since 1986. All the trading is done electronically.
Some things do not change.
The PSE trades in anticipation of the future as do most other stock markets. That is why prices do not react the way people expect them to as news is released. When everything seems stable in the ‘outside’ world and stock prices are going lower, then it is time to worry.
In 2013, the local stock market was up over 1,000 points and 20 percent in the first five months. Then it began going down and eventually lost all the gains for the year. But many bad things happened in 2013. Look at the list: Typhoon Maring/Trami, the Priority Development Assistance Fund scam, the Zamboanga City siege, the Bohol earthquake and finally Typhoon Haiyan/Yolanda.
Except, the first of those events happened in August when the market had already lost nearly 1,000 points.
Now in 2015 the market has started with a big boom to the upside and the forecasts for the year keep going higher almost daily. The last I saw was for PSEi 9,350. Sounds good to me. But stock market investing is like raising a child. Every day is a new adventure.
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E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter
@mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.