Investing for Income in the Philippine Market - March 2011 Update

Date

March 2011 has been a volatile month for the Philippine stock market.  The first half of the month was bearish due to crisis in Libya, and the earthquake, tsunami and nuclear meltdown crisis in Japan. On the other hand, there was a big jump of the index on the latter part of the month as triggered by the announced merger of PLDT (PSE:TEL, NYSE:PHI and Digitel (PSE:DGTL) and sustained by the news of improving economy of the US and easing concern in Libya and Japan.  In the end, the Philippine Stock Index gained by 7.66% to 4055.14 from 3766.73 on Feb. 28.  Our fund’s NAV, on the other hand,  gained by 2.44% to Php1.082 as influenced by PLDT and Globe, which are significant chunk in our portfolio.

In the month of March, we purchased additional shares of CEU, FEU and SHNG. We also added more shares of PLDT (TEL) just for dividend play (but with long-term investing perspective), which had its dividend ex-date on March 11, 2011.  We also added Pure Foods Preferred Shares (PFP) and BDO Leasing & Finance, Inc. (BLFI) to our portfolio. On the other hand, we unloaded all ACPR holdings while still trading at premium since Ayala Corp announced that it is about to redeem these shares on July 2011. At its price, there is no sense holding this stock until redemption date even if it has two more quarterly dividend payments coming.  We also took advantage of the traders ‘ speculative buying of Globe stocks and sold all shares that we bought in Feb. 2011 at a pretty good price.  Even if the announced acquisition of Digitel by PLDT seems good for the industry, this is still purely speculative and, I think, that its supposed effect to Globe’s performance is not coming soon.

Investing for Income in the Philippine Market - March 2011 Update

Top 10 Holdings as of March  31, 2011;

FPHP, Globe Telecom, Inc., Manulife Financial Corporation, Sun Life Financial Inc., Philippine Long Distance Telephone Company “Common”, Centro Escolar University , Shang Properties, Inc., Far Eastern University, Cash, Petron Corporation (Preferred)

Year-to-date Dividend Income: 1.60% (Net of taxes. All income are re-invested)




Category Filed in: Investing for Income in the Philippine Market
Local date: May, 2013

  • solteh

    Hi I don't mean to post an off-topic comment but it's just that your "Feedback" link doesn't seem to be working. Anyway just wanted to say that you have a great site containing truly relevant information. If you can take some constructive criticism, I think the writing can be improved so if you can find a partner to do the writing for you, this website/blog can really go places I think!

    Anyway, may I also respond to "Miguel" who asked about ACPR redemption -

    Miguel, I see what you are trying to say. Let's say that with three dividend payments to go, or a total of 7.09335; why would someone be willing to pay 107.40 for the preferred share (as I think they were last December)? And I think what you're getting at is that maybe that someone knows that the 9.4578% dividend rate will continue on past the redemption date, which is set three dividend payments from December 2010. That's a good point, and maybe you're right. Maybe some people have inside knowledge.

    But I should also point out that the market for ACPR, while not totally illiquid, is also not very liquid. It's not impossible that whoever paid 107 in December 2010 or even 106 January 2011 just couldn't value the preferred shares properly. Just my two cents. :-)

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