The information contained herein is based on sources which we believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. This firm and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.

Resting
by Prince Anthony A. Yeung
Thursday, July 22, 2010

Today's loss could have been worse but Ayala Land (ALI, up 3.39% to P15.25) made sure that it wouldn't. Countering the decline of other index issues, the main index's second largest component was responsible for cutting what was a 16.41 point loss to only 3.81 points. The decline of 0.11% led to a close at 3,414.90. On the other end of the spectrum, Metrobank (MBT, down 3.39% to P57.00) was the worst performing index issue. ALI and MBT were the two most active stocks for the day. Other stocks that made splashes today were Semirara (SCC, up 7.61% to P106.00) and Apex Mining (APX, up 50% to P4.05, and APXB, up 50% to P3.75). A total of 1.36 billion shares amounting to P3 billion changed hands today. Decliners outnumbered advancers 67 to 41 while 67 stocks remained unchanged.

Semirara and Apex added some excitement to an otherwise dull trading day. US markets were weaker due to the less optimistic outlook of Fed chief Bernanke on the US economy. While the local economic backdrop remains strong, the local stock market has been moving lower recently. One reason may be the continuing problem of the high budget deficit. The budget deficit for the first six months of 2010 came in at almost P200 billion, much higher than what was scheduled/planned. Investors will be looking towards the SONA (State of the Nation Address), where President Aquino may outline the steps his administration will take to curtail this certain problem. The SONA will also reveal President Aquino's gameplan in achieving his other goals such as cutting down corruption.

Apex shares limited up on the company's disclosure of the result of its first drill hole at its Maco Mine. According to the disclosure, the drill hole indicates the presence of high-grade gold in the mine. While this is only the initial result and many more will follow before anything concrete can be determined, it was enough to send the prices of its stocks soaring. Based on today's activity and performance, tomorrow will once again see much interest on APX and APXB. On the other hand, SCC has been consistently higher throughout the week. The company listed additional shares on Monday (from its recent rights offering) and has since gone up. It broke its previous 52 week and all-time high of P101.00 in setting a new one at P106.00, where the stock closed today. The company is into coal mining and more recently power generation.

One trading session is left before the implementation of a new trading system. The new trading system brings with it a host of changes from the fluctuation values to the new dynamic thresholds. Also, Monday will see President Aquino deliver his first SONA. These two events can have a huge impact on the local stock market. So investors might opt to wait for the two events before making big decisions. The bias for tomorrow is for another decline with trading activity staying where it has been lately, slightly below the YTD average.

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