The stock market

Title

The stock market

Language

English

Source

The American Chamber of Commerce Journal Volume XVIII (Issue No.12) December 1938

Year

1938

Rights

In Copyright - Educational Use Permitted

Fulltext

December, 1938 THE AMERICAN CHAMBER OF COMMERCE JOURNAL 19 The Stock Market (November I llh to December 8th) Hugh Robertson Ovejero & Hall November 11th to November 17th, inclusive: After six consecutive weeks of advance, a technical correc tion set in. The high point of the rise was recorded on November 11th with the averages reaching 111.42, and the volume of transactions on that day since May 25th, 1937. Considerable profit-taking was in evidence during the balance of the week, which closed with the index at 105.31 for a net loss of 5.60. The aggregate volume dur ing the four successive sessions of decline totalled rather less than P4 million, whereas the volume during the previous four sessions of advance exceeded the P6*/2 million mark. The only stock to move against the trend was San Mauricio which gained six points over the period to close at Pl.76. Mindanao Mother Lode held its ground to close unchanged at 111/2- With these exceptions, losses were more or less uniform through out the list, except in the case of Atok which lost 4^2 points to close at 26. The reason for’ this slump was not clear but it was to some extent pre cipitated by the switching of sizeable blocks of this stock into Big Wedge. On November 14th, in a letter to stockholders, the President of San Mauricio gave a report on the pro gress and prospects of the company. It was stated that this company’s ore reserves as at the end of the year, should approximate three years sup ply with an average value of P50.00 per ton. Total operating costs had been reduced to P21.39 per ton which would leave a margin of profit of P28.61 per ton. At the present monthly capacity of 9,000 to 10,000 tons, a monthly profit of approxi mately 21 o centavos per share should be maintained. The foregoing is yet another ex ample of the great potentialities of the Philippine Gold Mining industry, and credit is due the management for the genuine progress accomplished during the past year. November 18th to November 2 ’tth, inclusive: The week opened with a vigorous rally on Friday when the extensive losses of the previous day were fully recouped. Subsequently, interest was lacking and the market velopments have probably been the major reason for the continuation of the downward drift. However, there appeared necessity for further drifted slowly downwards on great ly reduced volume. The averages closing at 104.92 for a net loss of .39. Less favorable foreign political de Earnshaws flocks & Honolulu 'dlrnn fForta 60-118 SECOND STREET, (P. O. BOX 282) MANILA, PHILIPPINE ISLANDS Il BROADWAY. NEW YORK, N Y Ingersoll- 350 BRANNAN ST , SAN FRANCISCO /.V RESPONDING TO ADVERTISEMENTS PLEASE MENTION THE AMERICAN CHAMBER OE COMMERCE JOURNAL 20 THE AMERICAN CHAMBER OF COMMERCE JOURNAL December. 1938 consolidation of recent gains, while Public Holidays this month also tend ed to keep traders on the sidelines. The only stocks to successfully com bat the easiness were Itogon and San Mauricio. The former closing at 21J/2 up */> on unconfirmed rumors that a new vein carrying good values had been cut; San Mauricio closed the week unchanged at Pl.76. November 25th to December 1st, inclusive: During a short week’s trading, the line of least resistance proved to be upwards and a gain of 2.26 was recorded, the index closing at 107.18 on the lightest volume for some six weeks. Individual price movements were small and neither buyers and sellers showed much dis position to operate. During the pe riod, it became increasingly clear that a further period of consolidation would be required prior to a resump tion of the main upward trend, al though it appeared unlikely that much of a decline would materialize unless European conditions should deteriorate further. The widest gain during the week was made by Mambulao Consolidated which rose 3 points to 17on good development results. United Paracale was also strong, closing at 51. An tamok, Coco Grove and Demonstra tion moved meaninglessly against the trend each losing >/2 point in quiet trading. December 2nd to December 8th, inclusive: Although the market as a whole was somewhat more active, ac tual price changes in the leaders have been small. Over the period the aver ages showed a gain of 1.53 the in dex closing at 108.71 and are, thus, within striking distance of the previ ous resistance level. It would appear that equities of the leading producers are passing through a period of ex tended consolidation. Neither the numerous dividend announcements, nor the favorable production figures for November aroused any particular enthusiasm on the buying side. On the other hand, the recent severe drop in domestic sugar futures on the New York Coffee & Sugar Exchange, following the announcement of 1939 quotas, was almost completely ig nored by the market, and this must be considered favorably. The feature of the week has been the revival of interest in issues which have been neglected for a long period, and which have been quoted at nom inal prices. The advances recorded have been due to improved develop ment results; also that most of these issues have possibly been quoted at less than their intrinsic value. It is a sign of increasing public interest in the market as a whole, however, and indicates a definite revival of speculative interest. In the investment issues, Antamok and Benguet Consolidated have prov ed to be the leaders, the former gain ing 2*2 to close at 49>2 on the ex pectation that favorable development news will be released shortly. The 50f dividend announcement by Ben guet met with approval, and strong buying raised the bid to P13.30, for a gain of 40f. In the other issues, Crown Mines staged a meteoric ad vance from .01’2 to .04 apparently on the belief that the recent new dis coveries at Demonstration run into Crown ground outside the “city li mits”, thereby increasing the possi bility of some agreement with De monstration to work these claims. East Mindanao, Gumaus Goldfields and Northern Mining all turned ac tive and registered good advances. In retrospect, the action of the market over the past month has been encouraging. A decline of 2.20 points in the averages following a rise dur ing the previous month of 23.57 points must be construed favorably from a technical standpoint. While it should not be overlooked that the reaction has possibly not yet have run its course, there appears at the (Please turn to page 22) DEPENDABLE MARINE & STATIONARY DIESEL DU PONT MOTOREN-WERKE MANNHEIM A.-G. VORM. BENZ ABT. STAT. MOTORENBAU MWM PATENT BENZ TYPE RII 326 SU—140 IIP T YPE 11SII 326 SU—200 IIP Sole Agents C. ILLIES & Co., INC. 550-556 San Luis, Manila Tel: 5-69-89 DYNAMITE CAPS FUSE Stocks in Manila for Immediate Shipment Indent Orders Accepted for Future Delivery SMITH, BELL Co .,Ltd. Agents Cebu — MANILA — Iloilo Cagayan de Misamis IN RESPONDING TO ADVERTISEMENTS PLEASE MENTION THE AMERICAN CHAMBER OF COMMERCE JOURNAL 22 THE AMERICAN CHAMBER OF COMMERCE JOURNAL December. 19 38 market has declined, hovering peril ously close to new low ground. Technically, the New York mar ket appears to be gathering strength, and ominous news dispatches from abroad have so far failed to shake OVEJERO & HALL STOCK, COMMODITY & EXCHANGE BROKERS MEMBERS MANILA STOCK EXCHANGE NATIONAL PRODUCE EXCHANGE NEW YORK COFFEE & SUGAR EXCHANGE 6th Floor, Wilson Building Juan Luna, Manila Tel. 2-10-51 Cable Address OVERALL, Manila out any appreciable amount of stock. Seasonally, a rise can ordinarily be anticipated during the early months of the year and present market ac tion justifies the belief, barring un expected adverse developments abroad, that higher prices may be seen within the reasonably near fu ture. Overlooking, therefore, a fur ther period of indecision and irregu larity during coming weeks, the longer term outlook currently is for a continuation of the recovery cycle. A Timely . . . (Continued from page 18) knowledge, reflects to a great extent con ditions as they now exist at the mine. We realize that mining at best is a hazardous venture and these estimates may prove ex tremely optimistic as present future pros pects become history. On the other hand, we believe that there is sufficient reason to presume that instead of these estimates proving exceedingly optimistic they may very well exceedingly conservative. For this reason; the progress of San Mauricio over the next few months should be watched closely in order to fully participate in any change in market price, which will only be reflection of actual operations and condi tions as they exist at the mine. The Stock . . . (Continued from page 20) moment no reason why any parti cular weakness should develop pro viding world conditions remain about unchanged. In assessing the possibil ity of a reaction it is well to bear in mind that although the averages have staged a considerable percentage ad vance this has been largely accounted for by wide gains in only a few indi vidual issues. As these are apparent ly fully justified, in almost all cases, the market may not be in as vulner able a position as might be expected after such a sustained upward move ment. The likelihood of any runaway rise appears to be equally slim. Local and world conditions are not ripe for such a movement, however, it would appear that the present healthy con dition of the majority of the produ cers, and near producers, coupled with the increasing dividend dis bursements, would bring confidence and money enough to support a price structure irregularly higher than that to which we are now becoming accustomed and could lead to a some what more active market early next year. IN RESPONDING TO ADVERTISEMENTS PLEASE MENTION THE AMERICAN CHAMBER OF COMMERCE .JOURNAL

pages

19-20, 22

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