Will We See REIT's as an Investment Option in 2013?

REIT stands for Real Estate Investment Trust.

REITs are tradable securities whose underlying assets are property portfolios that earn from either real estate sales or rent.

They are issued by property developers and sold to investors whose funds are then reinvested into new property developments. [via Inquirer.net]

REIT makes it easier for small time investors to participate in investing in the real-estate market.

Although the REIT law was passed way back in 2009, there are still no offers available in the market. Issuers are not participating because of the government's stand on taxing this investment vehicle. Industry players are asking for a middle ground to this law, but the department of finance is not budging.

PSE will propose a set of regulations that will hopefully address the issue of the players involved. They target to have the first REIT offering in 2013.

Personally, this is an interesting opportunity because I believe real-estate in the Philippines is still undervalued. There's much room to grow thus the potential for generating income is also great.

Another All-Time High for PSE, passing beyond the 5,800 mark

In my previous post, I said that a healthy correction happened yesterday. A correction or retracement or reversal describes when the market goes down after it has gone up for a period of time.  It seems like a good retracement indeed, the Philippine Stock Market index today breached the 5,800 mark.

Even foreign investors are putting money in the Philippines except for Nomura. Though he's right in saying that the stock prices are becoming expensive, I believe the options are not yet exhausted though. There are still undervalued blue chips in the market. Probably a good time to invest in these because investors are now eyeing them.

For the month of December, my fearless forecast is it will continue to go up probably up to 5900+ by end of the year. Though I find it worrisome that the stock market is rising up too fast. Come January, we may see some large corrections until the market can breathe again.

DNL IPO on December 12

People who do stocks are all-eyes on D&L Industries, Inc. (Symbol: DNL) tomorrow, which will commence its initial public offering (IPO). Almost always, IPO's are hyped probably because it doesn't happen always, although this year there were already several companies who IPO'ed prior to DNL: GT Cap, East West Bank, Coal Asia, and Yehey (Although technically, YEHEY listed by way of introduction and is not considered IPO).

If there's hype, there's demand. DNL will be priced at P4.30 when it opens tomorrow, December 12, 2012. I read that it's over-subscribed; it means there's a strong demand. I didn't compute the P/E on my own but I read it's around 13.35. If it's true, the price is about average but on the lower end because P/E's are usually 16-17, but it should be compared with PE's of companies in the same industry.

I haven't participated in any IPO's yet, but I have already observed two. It's always hyped, and it usually goes up in the first day of trading, maybe even a few days after, then tumbles down after. DNL is a big company. It manufactures food additives and supplies large restaurants including Jollibee and Max's. This alone can attract attention and boost the hype.

For those who didn't have the chance to subscribe to IPO price, maybe you can buy tomorrow if the demand is good. But as with any IPO, I wouldn't advise you to hold it for too long until track record is proven, who knows, DNL can even be a blue chip someday.

And to add even more to the hype, DNL even have a countdown timer in its website:

Note: this is just an image and it is not working

Will Santa Claus Rally Start Soon?

In the stock market world, there's this thing called Santa Claus Rally. It is the rise of stock prices in the month of December. People are generally happy and have more money during this time of the year; thus people tend to invest more. It is also during this time when additional trades must be done for tax reasons.

Image from financialpost.com

The Philippine stock market is down 36 points today. It shouldn't be much of a worry, hopefully it is a healthy correction from the fast rise of the stock market last week. Let's see what happens tomorrow. My trades so far are producing fruits, thanks to the support group in the office who started way way before me. Currently holding MEG, MWC, UBP and AEV.

So will Santa Claus Rally start tomorrow? Nobody knows!

PSE reaches a new all-time high

For the first time, the Philippine stock market advanced beyond 5600 points. Exciting times! I wonder how long will this growth be sustained. Still need to be vigilant on the looming US fiscal cliff issue and EU's never-ending financial problem.

Seems our economy is booming. Philippine economy grew by 7.1%, beyond the 5.5% expectation and GDP is up 6.5%, already beyond the government's target of 5-6% by year-end. The Philippines was recently  included in the Newly Industrialized Country (NIC) category, which is a term for a country that is beyond a developing one but does not yet satisfy the signs of a developed country; it's like a 2nd-world country lol. So far, inflation is under control at 3.1% last October. These are good signs; more reasons to invest and believe in our country!

I'm happy today because two of my stocks are on the positive side: Manila Water (MWC) and SM Prime Holdings (SMPH). The golden question is when should I sell to realize my profit?

BPI raises SDA minimum to 500K

In my previous post, I wrote about investing in SDA, and choosing BPI because it had the lowest minimum investment which was only P50,000. Now, BPI announced it is raising the minimum investment to P500,000 effective this December. And my investment is below that amount.

What will happen to enrolled accounts with less than 500K

I talked to a BPI representative, and she said that the amount will placed to the settlement account if the enrolled amount is less than the minimum. It will not be re-enrolled this December. My investment is due every 28th of the month; she said that it is eligible for one last iteration.

What's the next best thing to do

I'm not sure yet, whether to just to invest it in bond or place it somewhere else. Then it will be subject to a holding period, where there is a pre-termination fee should you decide to withdraw it earlier than the required period.

[Update 1/13/2013] BPI Maxi Saver may be the next best thing, which shares similar features with SDA. It is liquid, in fact there's no lock-up period and low risk which is ideal for emergency funds. 1.25% interest + 1% bonus if you don't withdraw any money.

Blue Chip Companies in the Philippines

You can check the list of Blue Chips here:
http://www.pesobility.com/stock/blue-chips


Last week, I started investing in the Philippine stock market. So far so good, I invested in several blue chips MWC, SMPH, and MEG in which some went up and some went down. The index of Philippine Stock Exchange currently consists of the 30 major companies. I've added the list in the community wiki. These are the blue chips of the Philippines. They're relatively a better bet than other stocks because they tend to be more stable.

I gained 1.3% so far, and I believe it's still beginner's luck. 1.3% may seems small, but compared to how much a bank savings account make? Like 0.5% per year?

It was quite an experience, but I still have tons more to learn. I don't know how to read financial statements or compute the actual price/earning ratio. I need to research more about the fundamental and technical analyses. These are the two main schools of thought when it comes to investing in stocks; fundamental teaches you what to buy and technical teaches you when to buy.

I will continue to write more about my experience in the stock market soon, but as for now, I need to sleep.