Closely watched events

Immortalized as an ominous time in William Shakespeare’s play “Julius Caesar,” the Ides of March—or the period between March 13 and 15 in the old Roman calendar—seemed to have played out again as a dangerous date with what had happened last week.

For the market, it was a week of continuous daily losses that ended in a total weekly loss of 179.17 points or 2.62 percent.

The loss on Monday hit 19.82 points. Another 27.53 points were added to the losses on Tuesday.

These losses were almost wiped out on Wednesday as the market ended with a loss of only 9.86 points. Such come-back effort was totally demolished on Thursday as the market’s general weakness weighed on to send the market falling by 81.85 points more. On Friday, the market fell by another 40.11 points.

The total weekly volume was 10.06 billion shares while total weekly value turnover was P62.18 billion; foreign buying reached P36.43 billion while foreign selling was almost the same at P36.44 billion.

By recent standards, the market can be said to be trading on big-cap stocks, which may indicate that it is not on a reverse trend but, possibly, just on a momentary consolidation phase to weed out short-term market players, as stock prices are now at valuations supported by prospective future developments.

Even if this continues, it is possible that the market correction will not bring stock prices further down. It may, however, linger a while in view of the coming Holy Week.

Other ominous events

Wall Street was on its way to a 10-day fall last week.  Amid market movements that seem to reflect the soft market condition in the United States, an unimaginable event is peddled—“the Dow is going to crash.”

The crash was said to send the Dow down to about a third of where it is now.  What will trigger it was a puzzle.

Last Friday, North Korea fired short-range missiles onto the “Sea of Japan.”  This was preceded on Monday by an announcement from North Korea that “it had nullified the 1953 armistice that ended the Korean War.”

These acts seem to raise the potential resumption of armed conflict in the peninsula.  They also seemed to indicate a pattern of North Korea’s preparations to carry out short and long-range missile attacks and a calculated move of its leader, Kim Jong-un, to demonstrate that he would not hesitate to make good of his threats.

Foreign observers, however, are quick to dismiss it as “a desperate attempt to force the US and South Korea to restart stalled talks on denuclearization, in the hope of extracting aid and concessions.”  Other experts see it as Kim Jong-un’s ploy to divert political unrest in the home front.

After the cold war, its economy collapsed and North Korea faced chronic famine and international isolation, and it became dependent on China.

As of 2011, Chinese investments in North Korea exceeded $6 billion. China is reportedly providing 90 percent of North Korea’s energy requirement, 80 percent of its consumer goods needs and 45 percent of its food demands.

North Korea’s current acts, however, are testing China’s tolerance.  This creates a new dimension in their relationship.

Certain analysis suggest, though, that China has so much at stake.  Stability at the Korean peninsula is critical to its security.  North Korea, in turn, has no choice but to inevitably become “the fourth province of China” to save its dire economic situation.

Whatever it is, the apocalyptic threats of North Korea could always turn more than what some observers call “the noise of a dying regime.”

Bottom line spin

Disastrous events such as the fall of Wall Street and/or a war in the Korean peninsula will drive the market down to the ground.

These situations, however, seem far from happening considering several exciting events going on, including the effective elevation of the Philippines as one of the world’s elite gaming destinations with the launch on Saturday of the $1.2-billion Solaire Manila Resorts and Casino.

Solaire Manila is a subsidiary of Bloomberry Resorts Corp. (BLOOM), which holds one of four casino licenses awarded by the government in 2008 and 2009.  Port tycoon Enrique Razon controls 80 percent of BLOOM.

Razon spent $750 million to build Solaire’s first phase which opened on Saturday. Another $400 million will be spent to expand the facility. It will be completed by the third quarter of 2014.

The first phase of Solaire will make available about 18,500 square meters of gaming area with 300 tables and 1,200 slot machines, seven restaurants and a five-star hotel comparable in entertainment and excitement as Las Vegas or Singapore.

The expansion will include more VIP gaming space, a 1,800-seat theater to host travelling Broadway shows and local and foreign lounge acts, and 60,000 square meters of retail space that will house 30 to 40 high-end shops.  It will also feature a 300-room suite and more restaurants.

Solaire and Resorts World, a subsidiary of listed Alliance Global Inc. (AGI), are now the two major players in Manila’s entertainment and gaming arena. In July 2014, however, they will be joined by the Henry Sy group and partner Melco Crown Entertainment.

Another group, led by Japanese billionaire Kazuo Okada, is expected to open its gaming complex between 2015 and 2016.

Razon and its manager, Global Gaming Asset Management, hope the casino to realize 45 percent of its revenue from VIPs, or the high-rollers.

When all the four gaming hubs are operational, the Philippine gaming revenue is expect to hit $10 billion.

In the meantime, BLOOM’s market price on Friday closed at P14 per share, falling by as much as 40 percent in the past six months.  Some market observers found this odd as BLOOM just replaced SM Development Corp. (SMDC) in the roster of 30 most liquid and highly capitalized stocks in the bourse on March 11.

(The writer is a licensed stockbroker of Eagle Equities Inc. Inquiries can be sent to [email protected] , [email protected] or at www.kapitaltek.com)