Daily Market Notes December 10, 2009 on shorting, nihao, pacifica, ism, ajo

PSEi    3,006.57         UP     25.32
value php   2,149,600,855.00

DOW    51.08 +0.50% 10,337.05
NASDAQ 10.74 +0.49% 2,183.73
S&P 500  4.01 +0.37% 1,095.95

Yesterday's Wall Street equity bounce was attributed to the dollar's fall, and a rise in wholesale inventories and an upgrade of 3M.  Gold continues its slide to 1125, oil slips further to $70.

The Psei's volumeless rally was led by TEL's 30 peso rise to 2620 (on 55m nfb), and was worth 7 psei points.  PX's continued rebound to 16 also gave the bulls 6 psei points.  MER likewise ramped up to 205 on the last few minutes and contributed 5 bullish points on the index.  In closing, only 8 index stocks lost and lost slightly: BPI HLCM FPH DMC SMC/B ALI FGEN.

There were more losses of greater magnitude on the 2nd and 3rd liner sector led by JOH 2.60, MED .39, LIHC 10.50, ANI 25, ISM .0675 (but force closed .07), MUSX .115, NI 4.80, ACR 1.38,

Best overall gainers included PERC 8.30, PX 16.  Some big volume going on in AJO, still same price at .0575.  Since I've been getting queries on three almost similarly priced stocks, let's compare these:

AJO .0575, outstanding 5.1b, market cap 293m
PA .0775, outstanding 40B, market cap 3b
ISM .07, outstanding 190b, market cap 14b

Assume you know nothing, no technicals, no hush hush rumors, you can easily glean that ISM is the most expensive and is getting harder to climb, needing about 28m pesos per fluctuation to get to the next.

Now let's talk about shorting and Nihao.  Tomorrow is the date Nihao gets to list its 5 rights shares subscribed by investors for every one share held.  Some people are smart enough to think that if they sell today, December 10, then shares get listed tomorrow, then they will make the T+3 required number of days to deliver the actual shares to their selling broker.  What if a monkey wrench was thrown into the equation?  Assuming Nihao listing date would be moved to say, December 18, which is also their Annual Stockholders' meeting, wouldn't that create a short covering because no additional rights shares would be available for listing or delivery tomorrow or the next t+3?

Anyway, foreigners were net buy mostly just on EDC MBT MEG, and have toned down their selling in banks, and big cap property/holding ac ali smph sm ALL IN UNISON, signifying that these may turn up sooner than later.  Bluechips will benefit FIRST from this next rotation.

TOTAL FOREIGN BUYING   : P    944,130,286.40
TOTAL FOREIGN SELLING  : P    770,314,295.40

NO. OF ADVANCES:              44      
NO. OF DECLINES:              55      
NO. OF UNCHANGED:             65
NO. OF TRADED ISSUES:        164
NO. OF TRADES:             6,852

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