Thursday, May 1, 2014

SECB on the run

Two weeks ago, we wrote here:

SECB--it would also be useful to watch for increase in foreign buying again (like last year) before getting in or adding to existing positions. It would be ideal to see a combination for 3 among MACQ, CLSA, CSUISSE, JPMORGAN [meaning, foreign funds] to buy in bulk again. I'd also like to see WEALTH buying as well.

The two conditions were met today. 


1) WEALTH is buying again, significantly at that.
2) And it's not just three but five foreign funds--DEUTSCHE, CSUISSE, PEP, UBS, and ATR--are buying in bulk. 

The catalyst is the earnings announcement. 

Props for whoever prepared the the press release. It was perfect to emphasize the increase in interest income this year, as opposed to the huge trading gains that lifted SECB in 2012. This means that SECB indeed has its strong branch expansion bearing fruits. The bank has its eyes now competing in loans and deposits with the big three MBT, BDO, and MBT.

And then the chart:


Expect TA believers to buy more tomorrow, because SECB did important crosses yesterday. both long and short-term downtrends have been broken.

Looks like the core position that Ive kept and added to since July last year will bear fruit. Ive taken profit in some of the swings in SECB before, but here should come a bigger chunk. And I think I will buy (buy up!) one more tranche tomorrow until 121. (The only chartist concern should be short-term since RSI is now showing oversold).

Now, why did I stick it out with SECB? I think I mentioned elsewhere that this bank is a good value at current price and it is noticeably expanding branches everywhere.

It's apparent that the firm has a long term growth strategy. It knew it cannot stick by its income in just trading equities and bonds. It needs to expand its depositor base and loan customers, Now, whether SECB will indeed get close to the Big 3 in the next 5 years is another matter. I guess the way to know that is to become a customer of SECB. We'll look into this bank if indeed we decide to buy a house this year. A house? This deserves another blog post. 

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