Author: Investa

THE FIRST EVER SEC INVESTACUP IS HERE!

In celebration of World Investor Week and Investor Protection Week 2022, Investagrams and the Securities and Exchange Commission (SEC) bring you the SEC Investa Cup!

Here’s your opportunity to learn more about the stock market, trade your way to the top, and win awesome prizes. This competition is OPEN TO ALL and will run from October 17, 2022 to November 9, 2022. Take a look at the trading rules and mechanics for the SEC Investa Cup 2022.

Trading Rules and Mechanics

1. Registration. The first 200 free users on Investagrams to register can join the competition for free. Once the 200 slots have been filled, the registration will be closed for free users. InvestaPrime subscribers can join the competition for free at any time up until October 17, 2022. 

Important notes:

– Verification of ID is required to join the competition room. Please submit your Valid ID here.

– Only one (1) entry and account per person is allowed.

– If you have more than 1 account to join the competition, all accounts will be immediately DISQUALIFIED.

– You can change your Display Name, Username, and Profile Picture until THE DAY BEFORE the competition starts. Once the SEC InvestaCup begins, the system will not allow you to change the above-mentioned anymore.

2. Platform. The participants of SEC InvestaCup will use the Virtual Trading Platform of Investagrams which tracks the real-time stock price movements in the Philippine Stock Exchange (PSE). The system automatically calculates transaction fees to make it more realistic.

To know more about Investa vTrade, click here.

You can access the platform through the web, or download the app on Google Play or App Store.

3. Goal. The goal for the SEC InvestaCup is to  trade your account for the whole competition period and aim for the highest profits. The participants with the highest rankings while playing within the rules will be recognized as winners.

4. Starting Capital. Each participant will start with PHP 100,000.00 virtual money to trade.

5. Trading Hours. Weekdays from 9:30AM – 3:00PM. You can’t trade during off-hours and on weekends.

6. Tradable Stocks. Participants can only trade the listed tradable stocks for this competition. The tradable stocks are filtered by our system and qualify as liquid and actively traded stocks. You will be able to access the whole stock list once you are added to the Competition Room. The initial tradable stocks list will be posted over the weekend before the competition begins.

Penny Stocks will NOT be included in the list of tradable stocks due to their susceptibility to rinse and repeat abuses. Stocks that have come from PHP 1 levels and close at .99 or lower by the end of the week will be taken out of the list. This is to avoid any rinse and repeat abuses and deductions/disqualifications.

7. Diversification. To promote diversification and risk management, maximum exposure in a single stock can only be 1/3 or 33.33% of the portfolio. This requires the participants to buy at least 3 different stocks should they want to fully invest in their portfolio. The system won’t allow you to allocate more than 33.33% in a single stock.

8. Buying and Selling Conditions (For LONG positions) Participants now have two options when transacting. The first option is to transact using the current price of the stock and use market orders to buy and sell specific stocks at their real-time prices. The second option is to transact using our CONDITIONAL ORDERS. By using Conditional Orders, you won’t need to watch the market the whole day in order to transact in the market, you can now set AUTO CUT LOSS, AUTO TAKE PROFIT, and AUTO BUY ON BREAKOUT. You can also set these orders to GOOD TILL CANCELED so that your order will remain active until your buy/sell price is hit. Watch this tutorial.

Buy – You can buy the same stock multiple times within a day.

Sell – YOU CAN SELL THE SAME STOCK SIX (6) TIMES PER DAY.

In one stock per day you can sell TWO TIMES (2) at a PROFIT.

In one stock per day you can sell FOUR TIMES (4) at a LOSS. (cutloss)

9. Holding period for all stocks. We will be applying the twenty (20) minute time lock for taking profits to ALL STOCKS to avoid widespread and rinse-repeat trades. There will be no time lock or restrictions when selling at a loss.

10. Revision of Tradable Stocks. Investagrams and the SEC Team has the right to remove any stock from the list should it suddenly become too illiquid, abusable and/or delisted. Furthermore, Investagrams and the SEC Team may also add new stocks on the tradable list as new stocks become more active and tradable in the market. All changes will be announced before implementation.

In such cases that a stock is to be removed, we will follow this process:

• Investagrams shall notify all the participants via the Investagrams Platform before the market opens.
• If you still have the stock in your portfolio, you can sell it at any point in time at your discretion.

11. Initial Public Offering (IPO). All upcoming IPOs that will happen while the SEC InvestaCup is on-going will be added on its SECOND (2nd) trading day.

12. On Dividends that will be given during the SEC InvestaCup

• Stock Dividends that will be released by a company will be credited at the MORNING BEFORE THE MARKETS OPENS of the ex-date. Please note that stock dividends will cause price adjustments, so be aware if a stock you’re holding will release stock dividends.
• Cash Dividends that will be released by a company will NOT be credited to your total equity as the current system is still not able to credit cash divs.

13. On SRO that may happen during the SEC InvestaCup

Stock Rights Offerings (or SRO) is offered to existing shareholders of a specific stock to purchase additional shares at a price lower than the current market price in addition to their current shares at hand.

SRO’s can be deemed good for longer-term investors. However, in the short term, may POTENTIALLY lead to a possible decline or gap down in the stock. So it’s important to always be aware of this.

Participants in the SEC InvestaCup will not have an option to purchase additional shares from the SRO.

14. For stocks that will be detected by our WIDE-SPREAD DETECTION SYSTEM (WSDS). The Wide-Spread Detection System’s main condition is that the first (1st) best bid and ask should never be more than 2% at any moment during open market session.

Fig 1. Real-time Market Depth / Orderbook showing the first (1st) best bid-ask data.

Example: $ATN (Refer to Fig. 1)

Given:

1st best bid = 1.11

1st best ask = 1.14

Formula:

X = (1st best ask – 1st best bid) / 1st best bid

Condition:

If X is greater than 2% then WSDS detects that the stock is wide-spread and can be abused.

Solution:

X = (1.14 – 1.11) / 1.11 = 0.02700 x 100% = 2.70%

Verdict:

Since X is greater than 2% then the stock is wide-spread as computed by the system.

• The participant will be given a prompt that the detected stock is not tradable upon executing a buy or sell transaction.

• The stock will again be tradable once the system detects that the spread of the 1st best bids/asks are below 2%.

15. On Trading Abuses.

• Day trading opportunities on natural market moves are normal, but please take note that Investagrams and the SEC Team will be on full-guard against participants that abuse illiquid opportunities. We want our winners to show real trading skills that are applicable in the PSE. Abuse of intraday spread trades will NOT BE TOLERATED. These rules are set to protect against the usual ‘rinse-and-repeat’ abuses that are mostly used in virtual trading competitions like this.
• Read more about ‘rinse-and-repeat trading abuse’ here and why this is not characteristic of a realistic trading strategy.
• Any participants that have more than 10% of their profits from rinse-and-repeat wide spread, illiquid and other abusive trades will be penalized or DISQUALIFIED depending on the severity of their offenses. We will be able to validate this through our data and algorithms that verify the historical transactions of each participant.
• Any form of hacks, cheats, and abuses shall not be tolerated and will have corresponding repercussions. Suspicious behavior that may not be specified in the rules may also be flagged as ‘abusive’ trading behavior. Warning shall be sent after Investagrams has reviewed and confirmed that the actions are against the integrity of the competition. All trade records shall be verified and those who fail to follow the rules will be disqualified.
• Participants will only be given ONE (1) warning, any participant who has constantly repeated any abusive trading behaviors (whether illiquid stocks, system abuses, loophole abuses) will instantly be DISQUALIFIED. Investagrams and the SEC Team has the right to review any suspicious activity, and if the behavior is deemed inconsistent with real life trading then the said participant shall be disqualified.
• Questionable Transactions. Questionable transactions will be cross-checked through the buy and sell transaction time and the traded stock. Stocks that have more than 2% consistent gaps in the one (1) minute timeframe within the transaction period shall be deemed invalid and Investagrams and the SEC Team has the right to deduct the profits from the said transactions. It is normal to trade natural intraday moves and gaps can really happen, but if a participant is constantly trading stocks that have gaps within one (1) minute timeframe and their profits from these kinds of scenarios make up more than 10% of their total profits, then he/she will be automatically disqualified.

Fig 2. Example 1 for one (1) minute time frame gaps with buy (green arrow) and sell (red arrow) transactions

16. Trading halt. Stocks that are on a trading halt will not be tradable during the halt and will be tradable again during the announced lifting time.

17. Participant rankings. This is constantly updated every 10-minutes and automatically ranked by Investagrams system according to net profit gain/loss.

18. Deliberation period and the announcement of winners. At the end of the competition, at least one (1) week deliberation period shall be given to Investagrams and SEC’s team of moderators to verify trades and the confirmation of winners. The participants with the highest net profits will win. The resulting Top 1 to 10 participants after deliberation will be announced as the official winners.

19. Unexpected events. In the case of an unexpected event that interrupts the operations of PSE or the system of Investagrams, the competition shall be frozen and paused. Further notice shall be given and trading will resume once everything is back to normal.

20. Modification and adding of rules. Investagrams and the SEC have the right to modify the rules of the competition and add protective measures against any future abuses that may arise to ensure the integrity of the SEC InvestaCup. Announcements shall be made if there are any changes. Rest assured, we prioritize keeping the competition as FAIR as possible to all participants.

21. Ignorance of the rules is no excuse. All participants are expected to have read and understood the rules and mechanics of SEC InvestaCup. These are published for the participants’ information and protection. Ignorance of these rules and mechanics is not an acceptable excuse for violation.

22. Sponsors. Apple is not involved in any way in this competition. The sponsor(s) is/are solely responsible for providing the prize(s) listed herein. The prize(s) won are not apple products, nor are they related to apple in any way. The responsibility of organizing this competition and distributing the prize(s) are the sponsors’ responsibilities. Apple does not sponsor this competition in any way.

23. Joining the SEC InvestaCup means that you agree with all the clauses mentioned above.

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JOIN THE SEC INVESTA CUP 2022 TODAY

The economy is currently in a bad situation. During the past 3 quarters of 2022, the PSEI and S&P 500 dropped nearly 16.71% and 23.64% respectively. If you want to track these markets, you can head on over to Investagrams. Both local and global equities sank deeper into bear market territory as investors fear rising interest rates and possible recessions which could devastate the economy. 

Investors start to feel concerned and stressed about what to do given the current market conditions due to the abundance of FUD and the accompanying market volatility. For many investors, especially those who are just getting started, this is challenging. Nevertheless, it is wise to remember that market crashes are among the best times to buy. During a crisis, stock prices are much lower, allowing you to stock up on reliable investments for a discounted price. You will then benefit when the market eventually recovers.

What’s Going on in the Local Economy?

The USDPHP exchange rate has reached a record high and is still rising. On September 27, the exchange rate rose to PHP59 to USD, decreasing its value by almost 14% so far this year.

The International Monetary Fund anticipates that the Philippine economy would grow more slowly this year than initially expected as a result of the global economic slowdown and tightening financial conditions (IMF)

The IMF predicted that the economy will grow by 6.5%, which was less than its earlier prediction of 6.7% but still in line with the 6.5% to 7.5% growth objective set by the Philippine government. The economy was predicted to grow by 5.0% next year, which was unchanged from its July prediction but significantly less than the 6.3% growth predicted in April.

Inflation in the Philippines exceeded the central bank’s comfort zone of 2% to 4% for the period of January to August, averaging 4.9%. In order to battle inflation, the Bangko Sentral ng Pilipinas (BSP) has hiked interest rates a total of 225 basis points, raising the policy rate (PHCBIR=ECI) to 4.25%.

What’s Going on in the Global Economy?

It was projected that the global economic recovery from the pandemic would continue in 2022 and 2023, aided by advancements in the endeavor to vaccinate everyone around the world, supportive macroeconomic policies in the main nations, and favorable financial conditions.

However, the war in Ukraine will slow global growth and exacerbate inflationary pressures, creating a fresh negative supply shock for the world economy. The impacts of the war will be felt in many different ways and are likely to change as the fighting continues.

According to the WTO, when growth slows in major economies for various reasons, demand for imports is anticipated to decline.

High energy costs in Europe as a result of Russia’s invasion of Ukraine will reduce consumer expenditure and raise manufacturing expenses.

The tightening of monetary policy in the United States will have an impact on spending in industries where interest rates are significant, such as housing, automobiles, and fixed assets.

Along with sluggish external demand, COVID-19 breakouts and production interruptions are still a problem for China.

Overall energy price increases in August increased by 78% from the previous year. Food costs climbed by 11%, grain costs by 15%, and fertilizer costs by 60%.

In recent months, a lot of currencies have depreciated against the dollar, which is another factor raising the price of food and fuel.

History of Bear Markets

Bear Markets are a normal thing when it comes to the world of investing. Before the Covid-19 crash, there were multiple instances of bear markets in the economy. 

Take for example the stock market crash of 1929 which started the great depression. Stocks started to decline in September of that year, but in late October, on the 28th and 29th, there was a nearly 13% decline and a further almost 12% decline, respectively. Black Monday and Black Tuesday are widely recognized as the worst two days in history.

A few weeks later, the Dow experienced a 50% decline in value and started a protracted bear market. The market hit its absolute bottom in 1932, falling a startling 89% from its high.

One recent example would be the 2008 “Subprime Mortgage Crisis”. This collapse was the greatest since the Great Depression because of banks’ lax lending policies for mortgages. Government bailouts, new money injections into the economy, and historically low interest rates all contributed to the recovery.

The market did not recover for about 17 months. When it did, it began in 2009 and continued all the way to 2020, becoming one of the longest and most successful bull runs in history.

Bear Markets are an Opportunity

Bear markets are scary, and are probably one of the worst fears for some investors. However, as we take a look back at the history of bear markets, we can see how drastic the returns were for those who bought during the dip. 

Profiting from bear markets may lower your costs and increase your return on investment. Because drops are a natural part of the market’s rise and fall, they typically bring opportunities.

History shows that bull markets always come after bear markets. This allows you to benefit from them especially if you are just starting out in the world of investing and have a long-term vision.

Take for example Oil tycoon J. Paul Getty who abided by a simple business formula: “Buy when everyone else is selling, and hold on until everyone else is buying.” Getty purchased Pacific Western Oil Company and shares of TideWater Associated Oil Company, the country’s ninth-largest oil company. Five years after buying Tide Water shares for $2.12, they were worth more than $20.

Long-term benefits from bear markets can be achieved by developing a mindset similar to that of Getty. Although they might be unsettling, downturn markets often give investors opportunities. You can uncover possibilities to make profitable investments or, at the absolute least, keep the ones you already have if you know where to search.

What can we learn from the Investa Summit

“Whether you have a small amount of money or a big amount of money, it really boils down to the financial values and the foundation of the person”, Javi Medina.

The Investa Summit brought together a unique group of speakers who are market experts, professional and institutional traders in their field, and people who have actually changed their lives through trading the stock market, Cryptos, and much more. 

Talks about market mindset, mentality and psychology were one of the highlights of the event as we are currently facing an economic crisis.  Those who are able to access the Investa Summit may apply the lessons learned from the resource speakers into their own trading plan. 

“What’s required for you as a trader is obviously a high level of discipline in order for you to succeed”, Edmund Lee. 

While in the bear market, it is not easy for traders and investors to keep a calm mindset. Expand your knowledge about the market and learn new earning opportunities to help you maximize your profits in Stock Market, Cryptocurrency, and Global Markets! We have invited top experts in the finance industry to give you valuable insights and tactics to help you achieve financial freedom.

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@myholdings takes on the spotlight for this week’s featured trader as he shares his knowledge and insights on stocks from the PSEI. 

In a quote by David Sikhosana, he says “Losses are necessary, as long as they are associated with a technique to help you learn from them”. Given the state of the economy and the many uncertainties in the market, we must be able to anticipate changes and adjust in order to succeed and make money. @myholdings has acted in this way.

Our featured trader gave us his opinions on SMPH, the direction it might be headed in, and the disintegration of the real estate market as a result of high interest rates about 13 days ago. The market’s current state allowed @myholdings to forecast where the price could go.

During this specific trading period, @myholdings has plotted out a simple support line in the weekly time-frame starting from 26 up to 36. We can also see that the price has broken down from its previous support line and that the next possible direction is around 31.43 down to 27.80, as plotted by @myholdings. Typically, breakdowns indicate signs of bearish price action movement which is why @myholdings anticipated a drop in price in the days to come. Take notice also of the fundamental analysis of the stock which is quoted in green text. The P/BV is at 2.8686 meaning that the stock still has potential for future growth. The PE ratio is 40.54 which could be a problem since average PE ratios range from 20-25. Lastly, the Return on equity is 7.29% which is also considered low considering the fact that good ROE’s range between 15-20%. 

TECHNICALS OF THE TRADE

Technically, SMPH at the time was losing its uptrend momentum, breaking down from its previous support on the weekly timeframe. We may also see that the RSI, a momentum indicator, has broken down from its 50 levels which indicates that traders are starting to sell their positions considering everything going on in the market. Moreover, if we take a look at its MACD, a trend-following momentum indicator, we can see that it was diverging downwards which is usually a sign of a downward trend movement. All this being considered, @myholdings was able to forecast that the price would continue its downward movement following the recent breakdown in the chart. 

FUNDAMENTALS OF THE TRADE

SM Prime Holdings Inc. announced a long-term agreement for the supply of renewable energy with Aboitiz Power Corp. By the end of the year, this long-term agreement will power all SM Prime properties, including its shopping malls, apartments, offices, hotels, and other institutions covered by the Retail Competition and Open Access. According to the deal, AboitizPower would provide SM Prime with electricity from the PV Sinag’s Power Plants, Tiwi and MakBan Geothermal Power Plants, and other facilities run and managed by a subsidiary of AboitizPower called Aboitiz Renewables Inc.

Source: https://businessmirror.com.ph/2022/08/08/clean-energy-to-power-sm-malls/

WHAT SHOULD BE MY NEXT MOVE

In the weekly timeframe, SMPH is seen to be touching previous support levels now turned resistance. This could indicate that the price would bounce back and head downwards. Its current RSI has just recently visited the oversold levels which could mean that prices may start to go back up now. However, if we look at the MACD, it doesn’t seem like it would be the case since there doesn’t seem to be any signs of reversals. Moreover, the price action is very parabolic, meaning that the current green candle that we see could just be a “dead-cat bounce”, a temporary short-lived price recovery followed by a continuous downtrend movement. 

With the PSEI and economic status being in a bad state, it is best to be very cautious about your trades and the positions you are holding.

Despite being a blue chip stock, let us not take for granted the fundamental and technical factors that could affect its price in the market. With the given market conditions, it would be best to buy the dips without using too much of your capital. Always stay updated with relevant news for the stock you’ve chosen and practice due diligence. 

Once again, KUDOS to @myholdings for being this week’s featured trader! Enjoy your 14-day InvestaPrime Access and continue to be an inspiration to the trading community.

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@apsia2018 takes on the spotlight for this week’s featured trader as he shares his knowledge and insights on stocks from the PSEI. 

In a quote by Michael Carr he says “Don’t worry about what the markets are going to do, worry about what you are going to do in response to the markets.” His quote perfectly depicts how we should react to the market that we are in right now. With so many uncertainties, we must be able to be ready and adapt to the market situation to win and earn a profit. This is what @apsia2018 has done.  

Just recently, @apsia2018 shared his insights on LR about where to take entry and make a profit.

About 16 days ago, our featured trader showed us his thoughts on LR, the possible direction it could be heading, and his long-term plans for the stock. Despite the many uncertainties, @apsia2018 was positive that the stock would skyrocket in the days to come. 

During this specific trading period, @apsia2018 has plotted only multiple technical indicators which would help him predict price actions for his trading plan. As we can see, he has included bollinger bands and multiple EMA indicators which allows him to identify the average price of the stock for a specific amount of time. The price, as shown in the chart, is seen to be above all the plotted MA’s indicating an upward trend. He also included the RSI, a momentum indicator that allows traders to identify whether or not a stock is oversold or overpriced. As seen in the chart, the stock is not yet even at its oversold level, indicating that it still had the strength to push the price higher. This allowed @apsia2018 to grab the opportunity and put a call to trade LR. 

TECHNICALS OF THE TRADE

Technically, LR at the time was building momentum heading towards an uptrend movement. 

At a glance, we may notice that an increase in volume is seen to be taking place with prices slowly rising. We may also notice that RSI, a momentum indicator, was rising as well, which indicated strong buying activity in the market. It was also not at its oversold levels, indicating that it had more chances to go higher. MACD, a trend-following momentum indicator, was also seen to move in a positive direction as it diverges upward indicating bullish momentum. These indicators alone showed great signs of a breakout, which did happen after a couple of trading days. Many of those who grabbed the opportunity were lucky to earn great profits. 

FUNDAMENTALS OF THE TRADE

The Leisure & Resorts World Corporation (LRWC) announced that its 2Q 2022 EBITDA was positive. The Company was able to achieve Php 105 million in EBITDA for the second quarter of 2022, a 216% increase from last year’s EBITDA loss of Php90 million. This was made possible by the restart of the majority of its site operations and the introduction of its technology platform.

In the meantime, LRWC’s consolidated revenue increased by up to 250% on an annual basis to Php1.7 billion, producing a gross profit of Php 349 million. Despite its operating expenses more than doubling to Php 244 million, it still reported a net loss of Php 33 million for the quarter, a significant improvement of 85.51% from the 2Q loss of Php 230 million the prior year.

With the quarantine restrictions lifted and the majority of the population adjusting to the new normal, LRWC anticipates continued revenue growth, particularly in its retail segment.

Source: https://edge.pse.com.ph/openDiscViewer.do?edge_no=b60bba0ebcaaee3e3470cea4b051ca8f

WHAT SHOULD BE MY NEXT MOVE

In the daily time frame, LR is seen to be closing into its 52-week high with its current price being very overbought. This could indicate a possible reversal soon causing its price to plunge from its current levels. You may also notice that volume is starting to decline meaning people who bought earlier are planning to sell their positions soon. Moreover, the MACD indicator is showing signs of reversal, though it may not clearly show a cross, the gap is seen to be closing in together. 

With the PSEI and economic status being in a bad state, it is best to be very cautious about your trades and the positions you are holding.

There are multiple signs of a reversal for LR, so if you’ve bought earlier and are currently in a gain, it would be best to sell some of your current holdings since the price could drop any time soon. While that is at it, be sure to buy during the dips as the fundamentals of this stock currently show positive outlooks for the future. 

Once again, KUDOS to @apsia2018 for being this week’s featured trader! Enjoy your 14-day InvestaPrime Access and continue to be an inspiration to the trading community.

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