August 26, 2011- A Little Common Cents Corner #7 – Updated Analysis on AGI

The tales of the AGI tape can be seen as a push and pull between two very big sellers (UBS Securities or Broker 333) and (ATR KE or broker 220) selling 70 Mil clips worth of shares at 10.52 average price levels for the past 3 days, causing AGI to break the 10.50 (nice psychologically round number of support) closing near the lows of 10.42 last August 25, 2011.  It must be noted that there has been an impressive lot of bargain hunters coming from both domestic brokers and foreign institutional fronts.  For instance,  Thing On (328) added 14 Mil worth of shares at average of 10.48 making his position net buy for AGI from 64 Mil to 78 Mil as of last August 25, 2011.  Solar Securities bought 16Mil worth at an average of 10.60.   Further evidence of bargain hunting at prices near the 10.50 levels have been coming from foreign institutional fronts such as CLSA ( Broker ) and DBP Daiwa (142) .  For the past 3 days, AGI (Alliance Global) has fallen with quite a resistance between the 10.86-10.98 levels, but CLSA accumulated 30Mil worth at 10.54, while DBP Daiwa bought 28Mil at 10.56 averages.

The only question now, it appears is just how many shares of securities UBS plans to sell because so far this brokerage firm has sold 1.6 Bil worth of shares and still selling more.  If UBS gets more aggressive, it’s not unusual to see the stock fall down to 10.00 (where I’ll watch whether funds are still seen to be bargain hunting or not. )

In the big picture of schemes, the biggest supporters for the AGI stock are still CitisecOnline, DBP Daiwa both with over 1.5Bil and 1.2 Bil worth of shares respectively.  The biggest seller remains UBS securities which I wonder (if this can be tied with one cocktales’ report of Mr. Andrew Tan offering stock options for himself and his directors.)

According to an August 22, 2011 Cocktales.ph report (read here completely),

Tan, 62, is asking fellow shareholders to approve an executive stock option plan involving up to 300 million common shareholders, approximately three percent of the holding company’s outstanding shares.
That block is currently worth about a whopping P3.3 billion, give or take a few millions.
The stock option would be given to the chief executive (currently Tan), four highest paid executives, board members, “all current executive officers as a group,” and “all other employees as a group” as may be determined by the compensation and remuneration committee (composed currently of Tan, vice chairman Sergio Ortiz-Luis and independent director Alejo Villanueva Jr.)

It must be noted that just a few months ago, Mr. Andrew Tan sold shares of his AGI to purchase what we now know as GERI.  Now he’s paying himself stock options of 300 Mil shares?  I smell something fishy here if that cocktales article has some truth in it.

Alliance Global Completes 9.73 Billion Pesos Equity Placement (Bloomberg)
2011-04-05 01:57:13.232 GMT

By Cecilia Yap
    April 5 (Bloomberg) — Alliance Global Group Inc. and unit
Megaworld Corp. raised 9.73 billion pesos ($223.9 million) from
the sale of 872 million Alliance Global shares at 11.16 pesos
each.
    Proceeds from the share sale will fund Alliance Global’s
expansion into the tourism industry, the company said in a
disclosure to the stock exchange. UBS Investment Bank was the
bookrunner for the transaction, it said

Personal Conclusions:

Clearly, you shouldn’t be buying AGI if you’re a momentum player, as the cards are still playing out with UBS still a majority seller (What if he has 3.3 Bil worth of shares right?).  Nevertheless, if you’re a value investor trying to pick up shares, perhaps CitisecOnline and DBP Daiwa along with aggressive buyers such as CLSA recently will help relieve some of the short term pain.  This seems more like an EIP (dollar cost averaging play to me) and will become a long story to play out (perhaps 2-3 weeks of push and pull action between buyers and sellers first) before finding out the real winner of the match.

Hence, AGI is just a range trade- pick it up near supports of 10 or near 10.50, but make sure if you’re not a value investor, to observe your stops.  Strict resistances at 11.00 remain, unless UBS stops selling or gets exhausted of his shares.  (Note this analysis is purely technical, as fundamental reasons can probably alter a value investors’ decision).

If you’re a trader, your best bets still remain trading the volatile mining stocks.  Stick to buying pullbacks of LC, LCB, MA,MAB, (ZHI, NI, ORE if you’re aggressive with penny stocks) ONLY WHEN the timing is right.  Blindly buying any pullback is called catching a knife, and you don’t want to get hurt.

Please read my first analysis related to AGI in this report here.

(The trading day isn’t over, but as of 11:18 AM, AGI’s last closing price is at 10.28 with UBS winning the one day round, as we speak, some bargain hunters such as CLSA are seen to be selling their shares at 10.30).

– The Faceless Trader

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