Friday, March 23, 2018

Ytd, PH stockmarket is 3rd poorest performer in AsPac

Year to date (Ytd), January 01 to March 23, 2018, PH stockmarkets 3rd poorest performing in Asia Pacific after Japan and Shenzhen, China.

Buddy-buddy Duterte-Xi Jinping in spooking investor sentiment.

PH markets cheap already? Maybe, maybe not enough yet given continuing political uncertainty pulling down investor confidence. Below 8,000 is breached, it might go down further to 7,800.

Unnecessary uncertainties must go -- forcing the resignation of the SC CJ, her impeachment moves in Congress. Cha-cha de federalism and TRAIN 2, TRAIN 3, etc are already big uncertainties for businesses.

A friend Patrick noted, “the market has been expensive for at the upper quintile of its historical P/E range. so it's "priceyness" was even there way, way before CJ issues, TRAIN, cha-cha or federalism were even an idea. As you may not know, markets can remain irrationally expensive for sometime then go on selloffs once the sentiment turns. I think the Trump trade war pushed the market over the edge as it's economic. Domestically the economy has very few problems. Also foreign funds are selling ahead of China being added to MSCI EM index so if I were a foreign PM, I'd sell the expensive markets like PH and prepare for the massive China inclusion.”

Latest inflation rate data for Asia dragons and emerging markets are there. Out of 13 countries, PH has 2nd highest inflation jump in Feb 2018 vs Dec 2017, +1.2 percentage points, 2nd only to HK which experienced an outlier jump of 3.1% infl in Feb 2018 vs only 1.7% in Dec. 2017, also in Jan. 2018.

Not included in this big jump in PH inflation rate are fare hike adjustments by jeepneys, taxi, truckers, bus lines, shipping lines, airlines, no thanks to tax-tax-tax de TRAIN.

This "close Boracay" drama of Malacanang is unnecessary. Outright demolition of illegal structures might suffice. Big and small hotels, local and foreign airlines, big and small travel agencies, big and small boat enterprises, all affected by "close Boracay" pronouncements.

About the so-called US "trade war", I think it is just sensational media term. For now it's trade positioning, no actual "war" of high tariff vs high tariff yet. At $2B+/day of US trade deficit, for many years, this was ok with Bush administration, then Obama 8 years of "hope and change" but not ok with Trump.

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