Although the world is struggling, “West money” is helping this Southeast Asian stock market boom

After a year of slipping, Philippine stocks are beginning in 2019 in the best way in the world. A dream start also caused foreign investors to pour money into the Philippine stock market despite their massive withdrawal last year. The Philippines has really left behind the title of one of Asia’s worst stock markets in 2018.

At the moment, Rizal Commercial Bank Corp and AB Capital & Investment Corp have all pumped money to buy Philippine stocks instead of waiting for stocks to rise in price to discharge goods as they did last year. At the moment, Philippine stock has increased by 4.9% with a record increase of 1.7% at 10.50 am on 8/1. This momentum helps Philippine stocks can surpass the resistance level of 8,000 points in this quarter.

Optimistic psychology covered the Philippine stock market thanks to data of inflation slowing for the second consecutive month after peaking for 9 years, marking the biggest slowdown since May 5, 2018. Besides, the fact that the US Federal Reserve has signaled to slow down the process of raising interest rates made investors more secure in the down payment.

At the moment, foreign investors have pumped $ 49 million into securities funds this year. It also marked the longest net buying of foreign investors in the last 5 months. Last year, foreign investors withdrew $ 1.08 billion from the Philippine stock market, contributing to accelerating the slump in this market.

Meanwhile, many foreign investors expect Philippine stocks can increase to 8,100 to 8,200 points in the coming time. That means a huge profit if money is down at this time. The main task of investors at the moment is to choose good stocks to invest and make a profit.
Nomura Chetan Seth and Jayant Parasramka analysts said that currently, banking stocks and consumer-related businesses are being sought by investors. In addition, cash flow is being poured into stocks with medium market capitalization and the largest enterprises in the market in the hope of boosting the benchmark higher, helping to increase the attractiveness of Philippine securities.

If optimistic signs continue to be maintained, analysts believe that Philippine stocks may hit 8,300 points or even 8,400 points. Good statistics in the first quarter of 2019 will greatly contribute to the growth potential of this Southeast Asian stock market and vice versa.

Even more optimistic, UBS AG strategist Jody Santiago, believes that slow inflation may boost spending and profit margins can surprise corporate profits. If these become real, Philippine stocks may rise to 8,900 points this year.

Going back to reality, it is hard to say that foreign capital inflows into the Philippines market are a reversal compared to the wave of withdrawals last year. However, it can be affirmed that pouring capital into the market shows that investors are very interested in Philippine stocks in particular and emerging markets in general.

Chinese Stocks Fell The Worst in 2018

According to Bloomberg, the Shanghai Composite Index has dropped by nearly 25% compared to the beginning of the year, making China a big stock market with the strongest decline in the world 2018.

The booming trade war between the US and China is seen as the main reason why Chinese stocks “evaporate” $ 2.3 trillion worth of capitalization this year.

Along with that, the debt reduction campaign in the economy pursued by Beijing has caused the debt margin on the stock market to fall to about one third compared to the peak in 2015.

Foreign investors continue to buy listed shares in the mainland China market through connection with Hong Kong stock, and Chinese state funds are supposed to intervene in the market to support prices. share. However, the indexes of Chinese stocks have continuously dropped sharply.

In addition to the US-China trade war, Chinese securities investors are also concerned about the slowdown of the domestic economy.

The $ 2.3 trillion capitalization decline of Chinese stocks this year was the strongest since Bloomberg began saving data on this market in 2002. The similar near capitalization of Chinese securities occurred. came into the global financial crisis 10 years ago, when the Shanghai Composite Index dropped 65%.

With the decrease in capitalization, China this year ceded the position of the second largest stock market in the world to Japan.

Along with the decline of the market is the decline of trading volume. The daily average trading volume of the Shanghai and Shenzhen exchanges combined has dropped to about 369 billion yuan, equivalent to $ 54 billion, the lowest level since 2014.

In Thursday’s session, only about 263.8 billion yuan of votes were transferred on both exchanges, about one-tenth of the peak in 2015.

China’s debt reduction campaign has achieved some results, at least in the stock market because of speculative activity.

The total outstanding securities margin is only about 756 billion Yuan on Tuesday this week, about 1/3 of the peak 3 years ago. In 2015, Chinese securities investors borrowed collateral at a record level to buy stocks, leading to a stock bubble.

Many loss investors have fled the Chinese stock market this year. A total of 75 mutual funds with a focus on Chinese securities dissolved in the year, according to Bloomberg data, the highest level ever since the data began to be recorded in 2007. Over the past 11 years , there are 88 Chinese securities mutual funds come to the dissolution outcome.

 

 

 

 

 

 

How the Stock Market Works – Beginners

The stock market has been proven to be one of the best ways to become a financial success. Modern technology allows us to access the market a lot faster and have the opportunity to gain information about trades, stocks and companies instantly. With all this information, it might seem as if trading stock is easy, but one of the biggest mistakes people make at first is not learning what the stock market is and how it works.

This is the first step to finding out how you can become a stock trader and what it actually means to trade. To understand the basics of the stock market, we need to break it down and make it as simple as possible. Therefore, we’ll use simple examples and keep things on a smaller scale, allowing you as a beginner to understand exactly what the trading process is all about.

What are Stocks?

Stocks are shares of a company that you can own, meaning you’ll own a share of the company. This doesn’t mean you become part of the company or anything, but rather that you are investing your money in the company with the goal that it would become more valuable.

A simple example of this would be buying a piece of cake, it might be a tiny slice, but you own part of that cake. Now to get that slice, you need to be linked to a “store”, which in the trading world is known as a broker that’s available via telephone or the more popular option in today’s internet driven world is a trading website or app.

Why Own Stocks?

Doing your research on companies is important as it provides information about the company, where they’re headed and the future value of the company. The idea is to make money, “buy low, sell high”, meaning your slice of cake has to increase in value before it becomes worth selling.

Therefore, it’s important to research and determine whether the value would increase over time. Of course, it’s completely possible for a much higher price in a few weeks, months or years from now. Perhaps the cake is something new and expected to become very popular within the next few months, or it’s becoming rare, and people are prepared to pay more for it sometime soon.
The fact is, there are many reasons you’d want to purchase part of a company, but at the same time, there are just as many reasons (if not more) why the value of the stock could decrease.

Why Sell Stocks?

Owning a share doesn’t give you anything but an increase or decrease in value, meaning you can’t use the share to pay for your bills or purchase anything. However, you can sell the stock for a profit and use the funds you receive to pay for things or buy into a new company.

There are many reasons to sell a stock, not only relating to the need for funds, but also the future of the stock you own. For example, you’d sell a stock if the value isn’t expected to increase further or you think it might go down due to recent occurrences within the company.

Kevin Muir Alerts We only a Few Steps Away from Dot-Con Stupidity

We not at the “2000 levels of stupidity yet, but we are getting really close according to Kevin Muir. Business Week recently published that Muir said that darling of the bubble days, Sun was priced way beyond perfection, it was priced so far beyond it that is was head-shakenly-stupid. In 2009 after the stock reached $64, McNealy predicted that the stock would drop down below single digits before it was bought at -0.25% by Oracle for a sum of $7.4 billion. So, the big question is, will there be an overheating period for the stock market like it was back in the heydays of the dot-com days, and on this Muir says it is not time to sound the alarm although that day is moving closer.


Muir said that it is not near 2000 yet although he needs to acknowledge the numbers that never lies and by looking at the metric, we are but a few tricks away from matching the stupidity of the Dot-Con days.

Kevin Muir is a market strategist at East West Investment Management

Muir revealed in the April publication of Business week that the quote he loves the most is that of Scott McNealy on the Bubble and Regulation, he feels it shows how absurd the SUN Microsystems was evaluated at the high of the Dot-Con bubble, it was the time when trading was all about the system beasts.

The computers were the best in power, compared to the behemoths, Windows PCs were nothing they were toys. The SUN microsystem everyone believed would rule the world, the company priced for perfection was that of Scotty Mc Nealy, or as Muir now puts it, it was priced so far beyond perfection that it was nothing but stupid and insane.

Twenty-Eight Trades at Fifteen Time Revenue

He brings up Scott’s tweet as a reminder at just how absurd valuations were at the time. Twenty-nine stocks at the time traded above ten times their revenue during the dot-com mania, today Facebook is one of the 28 that traded at more than fifteen-time revenue, and that is actually over 50% above what the Sun Micro did during its peak.

What is ironic is that Facebook today resides at the old headquarters of the Sun. Muir says he can’t say that the social media giant will follow the same path but what he can acknowledge is that tons of investors will at some point in the future. Jesse Felder agrees with Muir and says that the stock market, today is as stupid and crazy as it was during the peak of the Dot-Com mania.

Air Transportation Prices Derailed

Air Transportation Prices Derailed

Air Transportation Prices Derailed

Air travel is increasingly becoming more and more expensive with less and less perks. Have you ever noticed that the taxes and fees cost twice as much as the actual cost of air transportation? Look at your travel receipt and you would know what I am talking about. It seems very unfair, right? What about the decline of the all-inclusive seat, that is, a free meal and 2 pieces of checked luggage included? Not long ago, you would be given an allowance for 2 pieces of 70 pounds each, luggage allowance. Present day, you are limited to 50 pounds, if flying economy class, and you may even have to pay for each checked luggage. Granted, 70 pounds may be too heavy to lift for the average person, but packing a suitcase with only 50 pounds can be hurtful when you take that long awaited vacation only to realize you can’t return home with the entire souvenir store in tow.

Fuel prices, competition, demand and supply are the four major factors that influenced these changes, with the first two factors accounting for the most damage theoretically. Every time a price fluctuates higher, airlines pass on the bill to consumers. Many articles will tell you that airline companies barely make any profit and some airlines use this fact to cram in more seats, destroying what little elbow room you once enjoyed before. The truth of the matter is, some airlines have indeed gone bankrupt while others have been merged, causing a lack of competition and incentive to gain sales. With two, sometimes three major airlines in a developed country and millions of consumers flying every day, airlines can charge as much as they please because options are limited to us, as customers.

Let’s put the fees into perspective. To fly a plane, you need to have fuel so you have the cost of fuel, you also need at least 2 to 3 pilots depending on the size of the plane and the length of your journey. Air stewards are also a must and for long haul travel and international flights, you would have food, drinks and snacks onboard. You would also have personnel working in varying positions, such as administration, IT, accounting, baggage handlers, mechanics and customer service representatives. Then you have the fees and taxes that are mandatory such as security, transportation tax, customs fees, immigration fees, international tax, facility fee or basically parking fee for using the airport, to name a few. Each fee may seem minimal when looked at it individually, but if you really sit and add them up together, they amount to a lot more than you would have bargained for.

Prices for air transportation would no longer be as low as before, only fluctuating based on the load factor, that is, amount of person needed to fill the plane. Airlines would lower prices to fill planes but this only happens when both demand and load factor are low. Knowing when to get cheap airfare is rather difficult but you may strike luck if you are flexible when you travel. In reality, business travellers and leisure travellers are the two types of customers that cause prices to fluctuate.