Claim of command

Last Tuesday, our leader Benigno Simeon (aka BS) banged the bell at the Philippine Stock Exchange, signaling the start of action on the trading floor.

What was the big deal? It seemed that, since the PSE index hit the 8,000-point level recently, it should be time for a little celebration—care of Malacañang.

The index, a grouping of selected stocks, is an important tool in the securities market to indicate the trends, going toward either investment heaven or financial Ebola.

In his awe-inspiring bell ringing feat at the PSE, our dear leader, BS, noted that in the past five years during his watch, the PSE index has doubled.

Yesterday, or just a day after his bell ringing at the PSE, the index began to show a marked downturn.

I could not be certain if the downturn could just be a plain coincidence or an indication of the trust and confidence of investors in our dear leader, BS, and the boast of his boys about his economic management prowess.

As of lunchtime yesterday, the index already dropped by 129 points, staying below the 8,000-mark.

Again—that index level was the perfect reason for our dear leader, BS, to once again ring the PSE bell, this time to celebrate his leadership and his “Daang Matuwid” slogan.

His popularity ratings seemed going down somewhere there in the vicinity of purgatory.

To think, the “selling” trend at the PSE yesterday chopped off a relatively huge chunk of the PSE index, even as our dear leader, BS, could be the only head of state in the entire universe to use a stock market crystal ball.

In his speech, he reportedly made a forecast on where the stock market should be heading—a PSE index of between 9,000 and 10,000 points by the end of his term next year.

No finance or economic official in his right mind would dare to give even just a little sign language to indicate the vaguest of hints on the possible direction of the stock market.

The reason: such statements could be taken by the public as an official encouragement for everybody to buy stocks.

In this world where market analysis could be regarded as the closest practical application of fortune telling in the real world, nobody would ever dare to forecast the stock market with much certainty. Really, there would always be a caveat!

Even professional market analysts and traders could only talk about “factors” that might affect the market, careful to cite both the rewards and the risks.

As people in the financial sector loved to say, predicting the stock market would always be a task just for a fool or a retardate.

From what I gathered, the celebration at the PSE last Tuesday was actually “suggested” by the Palace bright boys to the PSE chain of command.

Aside from the ringing of the ceremonial bell, he just had to deliver the obligatory speech to trumpet his economic management record and corruption busting illusion.

It was just that our contacts in the financial sector had a bit of reservation regarding our dear leader, BS, and his direct hand in creating active trading in the market.

The comprehensive capital market reform program had its conception during the time of former President Corazon Aquino, which the administration of former President Fidel Ramos implemented relentlessly.

During the time of former President Gloria Macapagal-Arroyo, her cute administration egged the PSE to acquire the latest trading technology from the New York Stock Exchange, and she personally accompanied the PSE officials to seal the deal with NYSE.

And, of course, former President Joseph Estrada gave us the BW price manipulation scandal.

Our contacts wonder whether there is something concrete that our leader, BS, really did for the stock market, except to claim that “confidence” built up in the market under his command.

The last time he rang the PSE bell, which was in 2012, only PSE officials were present plus a handful of Cabinet members such as Finance Secretary Cesar Purisima.

Last Tuesday, he had a high-powered audience. From what I gathered, the PSE called on the biggest of the big names in business to attend the event.

Among them were Teresita Sy-Coson (SM group), Lance Gokongwei (JG Summit), Jaime Augusto Zobel de Ayala (Ayala group), Jonathan T. Gotianun (Filinvest), and Ramon Ang (San Miguel group).

Bank presidents Cezar Consing (BPI) and Lorenzo Tan (RCBC) were also present, and the right hand man of MVP, Jose Lim (Metro Pacific).

Also there were Antonieta Ibe and Teresita Herbosa (SEC), Finance Secretary Cesar Purisima, Trade Secretary Gregory Domingo and GSIS president Robert Vergara.

It never happened before, a group of powerful individuals just sitting idly by while somebody talked about his perceived achievements.

In the stock market, some analysts were already sending warnings of possible correction—meaning the index would drop—even before our leader, BS, talked about the index hitting the 9,000 to 10,000 during his term.

At a current PE ratio of 25 times of Philippine stocks in general, some analysts view the market as overpriced, because the accepted standard worldwide has always been that the PE ratio of 20 times would be a pricey market.

In the local stock market, you could see a PE ratio of 67 times for a well known property company, not to mention a PE ratio of 360 times for some speculative stocks.

Yet our dear leader, BS, could talk about the index hitting 10,000 points next year.

Perhaps the SEC or the PSE could investigate him for market manipulation? You wish!

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