Philippines and Malaysia: Brightest stars in Asia

For Philippine stock traders who don't monitor Asia/Europe/America Equities. Philippines and Malaysia Funds who are listed in several big firms like JP Morgan, HSBC,etc. ranked Top 10 on best return yield(Equities) for 2011. Philippines hit top return for Asia.

I guess there are a lot of believers here in Philippines, or is it just that Philippine Stock Market is full of haux and speculative market movers?

We all know that only less than 1% of the total population in the country trades in the Philippine Stock Market, and most of them are big hedge fund managers or Business tycoons. We may not know what they are thinking in terms of Asset Growth. But only in the Philippines, they can shoot stocks up to 10-100x their value in just 6-18months (LC, GEO, NI, UBP, AGI, MER and so much more).

With the current Price to Earnings Ratio of PH. It is now at 18.50, most expensive in Asia. And the only one in Asia to make an All time High. For the past few days, U.S. and Europe already started a slow-to-medium speed correction. What do we expect then to PSE?

Technically speaking, all countries (US,Europe, HK,AU,PH, Singapore and others), got a Negative Divergence, meaning, a technical indicator that accumulation/volume is decreasing, and a possible correction is coming.

If U.S. and Europe corrects 3-7% in the next few weeks, we also expect PSE to take a breather, or even higher than 7%. Remember that the 3700 to 5000 level is a 35% rally without any pause. a 10% or more correction is normal and helpful to this economy.

PSE has lots of light support, starting with 4800 level, then 4750, a much stronger support pegs around 4550-4600 (The 2011 Highs). In any case that Market corrects to these levels, just assume first that PSE has only reached its "FAIR" level.

4750 level is a good entry point. and 4550-4600 is a better one. A visit to below 4550 is a completely different bearish sentiment (and an even interesting Buying point). Choose your battle. I prefer to buy HK, AU, Singapore Market at the meantime for their cheap P/E Ratios.



Malaysia is now at P/E 16.50, almost same level to Korea. Malaysia is the next Country to revisit its 2011 Highs, we can see on the charts below that it formed a double top. And may take a good opportunity on the possible correction to take a breather and follow PSE's footstep once it also breaks out of its All time High (Double Top).

MY is still a growing economy, and compared with PH, MY and PH stock market moves the same path for the past 5 years. Now think ahead, is it MY lagging behind, or PH overshooting?

I will post on the next few days other U.S./Europe/Asia Equity Analysis.