THE ABOVE line is the title of an old song that came to my mind as I looked at the chart of the market. It gives a striking description of what the market is doing at this time?going ?Up, up and away!?
Coincidentally, the Chinese ghost month is ending this week. According to those who believe and follow this phenomenon, as the event draws to a close, the ?ghost? that had somehow weighed down on the market would be departing. As a consequence, the market will now go ?up, up and away,? too!
Problems
Despite this prognosis, trading participants are not entirely happy, yet. Several problems haunt them. Most of these are have something to do with the introduction of the new computer system.
If you remember TTJ, my stockbroker friend who once in a while gets a line in my column for his delightful or constructive contributions, is upset about what?s happening lately in the bourse. He is particularly peeved by the PSE website that has been down all week.
In a mobile phone text message, he said he was very upset about the seemingly absence of action by bourse personnel on the matter.
He sent the following ?lecture? on the subject: ?Information is the lifeblood of stock trading decisions. Listed companies disseminate corporate action plans through (the) PSE website (among other things). But the PSE website has been down for a week and still no alternate solution has been provided.?
Extremely frustrated, he sent the follow through message: ?Will it be alright for the TPs (trading partners) to fine PSE??
This follow through message is actually reflective of another issue that frustrates trading participants like TTJ who belong to the so-called silent majority in the balance of power in the PSE.
To date, despite the many supposed reforms introduced to make the PSE an open organization and as professional as it can be, the so-called silent majority still find themselves in an ?old boy?s club.?
TTJ proceeded with a litany of other complaints. This time, his focus shifted to his personal feelings on the cost of the new computer system and the inadequacy of its design.
TTJ thinks the P400 million spent for the acquisition of the new computer system is just too much, but its performance falls short of what is expected from that cost.
He felt that the PSE could have saved much had it sourced the new computer system locally.
?We spent so much on the system but we still need to use the Broker Utility (BU) courtesy of Citisec. Maybe life can be simpler if we (just) use the BU instead,? he said.
Not so swift actions
I was especially delighted to see the new PSE president, Val Suarez, himself at the trading floor last Wednesday to apparently address the various complaints of trading participants.
He came to the booth where my colleague and I were huddled to make us feel that our IT&C problems were over. In front of us, he shot instructions to his technical head to quickly eliminate the problems that similarly bother TTJ.
As stated earlier, the PSE website had been down. The bourse stopped printing copies of company disclosures. This left trading participants no timely source but the newspapers, which are a day late on these matters.
With pompous confidence, he assured us that our problem with failing WiFi service will totally banish from then on.
Come to think of it, my WiFi connection worked well while he was there. This made me very happy. It magically erased all the frustrations that I have suffered in the past.
However, just as soon as he left, my Internet connection started to fail again. As if the plugs were with him, the wifi service left with him.
Since then up to the weekend, we were like TTJ left without continuous WiFi access and timely company disclosures. And since then, too, the members of the technical staff could just offer a blank stare at complaining trading participants.
Bottom line spin
Like I said before, as the market continues with its upward trend, better stick to stocks with actual fundamentals. Exercise caution even in stocks that seemingly have good story lines but are yet to happen in the future. There are a lot of them now. Give them more time to perform on the basis of their unfolding fundamentals. Play for value is now the game in the market.
If you have noticed, foreign buying has been concentrated on stocks that are still undervalued at this point in time. Among these are Union Bank of the Philippines and First Philippine Holdings Corp. (FPH), as I have recommended earlier.
There is no room for speculation at this time. Like it is said, any point in the market could be a turning point. The market at this time has gone high enough that the momentum of stock prices can only be fueled by their fundamentals.
(You may reach the Market Rider at marketrider@inquirer.com.ph or at densomera@yahoo.com)
