Pacific Online Resources Corp.'s (LOTO) IPO today caught me by surprise: from the offer price of PhP8.88, it ended the trading day at PhP13.25, a massive 49% intra-day increase. If say, you put in a hundred grand, you'd have easily earned PhP50,000 by lunch time.
LOTO is the exclusive online lottery system provider of the Philippine Charity Sweepstakes Office in the Visayas and Mindanao areas.
I don't know much about the company and since details about the financial operations remain sketchy, I prudently stayed away. I remain skeptical whether the company will be able to reach its revenue targets.
Again, the heavy interest in LOTO's IPO only indicates there's excess liquidity. With the low interest rates offerred by banks and bonds (less than 1% rate PER ANNUM for savings account, imagine that!) small time investors like me are scouring for alternative investments that at least would yield returns above the inflation rate.
Thanks to an increasing number of OFW professionals such as nurses and IT personnel, dollar remittances continue to rise, expected to hit US$16 billion by the end of this year. Consequently, a significant portion is making its way into the housing and property markets, fueling the current boom.
In addition, the hefty inflows of OFW remittances have even pushed dollar reserves to unprecedented levels, at around US$21.3 billion as of end February this year (US$20 billion in 2006), pushing additional pressure on the peso to appreciate vis-a-vis the greenback and providing additional leg room for interest rates and inflation.
The spectacular intra-day rise I think means speculators and punters are back again. This usually happens for stock offerrings meant for local investors, as in the case of LOTO.
Next in line is National Reinsurance, GMA-7, and the franchise holder of McDonald's (I forgot the name of the company). At least these are all solid companies with good earnings track records.
LOTO is the exclusive online lottery system provider of the Philippine Charity Sweepstakes Office in the Visayas and Mindanao areas.
I don't know much about the company and since details about the financial operations remain sketchy, I prudently stayed away. I remain skeptical whether the company will be able to reach its revenue targets.
Again, the heavy interest in LOTO's IPO only indicates there's excess liquidity. With the low interest rates offerred by banks and bonds (less than 1% rate PER ANNUM for savings account, imagine that!) small time investors like me are scouring for alternative investments that at least would yield returns above the inflation rate.
Thanks to an increasing number of OFW professionals such as nurses and IT personnel, dollar remittances continue to rise, expected to hit US$16 billion by the end of this year. Consequently, a significant portion is making its way into the housing and property markets, fueling the current boom.
In addition, the hefty inflows of OFW remittances have even pushed dollar reserves to unprecedented levels, at around US$21.3 billion as of end February this year (US$20 billion in 2006), pushing additional pressure on the peso to appreciate vis-a-vis the greenback and providing additional leg room for interest rates and inflation.
The spectacular intra-day rise I think means speculators and punters are back again. This usually happens for stock offerrings meant for local investors, as in the case of LOTO.
Next in line is National Reinsurance, GMA-7, and the franchise holder of McDonald's (I forgot the name of the company). At least these are all solid companies with good earnings track records.
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