MERalco going regional

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The last time I shared my analysis of Meralco(MER) its stock price was around the 275(read my previous post about Meralco here) level and now as the MVP led company expands not only in power generation but also regional, stock price is now at 320 level and as per COL’s fair valuation at 380 per share I think this going regional is a big step.

Also looking at the all years horizon, I spotted that MER has this ascending triangle formation(which already broke out):

Meralco's chart indicates it is already in its continuation from the ascending triangle pattern formation

In my opinion MER will go up to 350 within the next 3-6 months. With the healthy Philippine economy and their first bold step to expand outside the Philippines, Meralco will be shining brighter as expected.

MER 1 year stock chart

Quoted below is a news article about their latest venture in power generation:

Meralco, First Pacific complete Singapore LNG plant buy-in

By Iris C. Gonzales (The Philippine Star) | Updated April 2, 2013 – 12:00am

MANILA, Philippines – Manila Electric Co. (Meralco) has completed the purchase of a 70-percent stake in a Singapore power plant project, the power utility said in a disclosure to the Philippine Stock Exchange (PSE) yesterday.

Meralco, the country’s largest power distributor, said it has already completed the acquisition of a 70-percent stake in an 800-megawatt liquefied natural gas project in Singapore for $488 million.

Meralco subsidiary PowerGen Corp. and Hong Kong-based conglomerate First Pacific Co. Ltd. have formed a joint venture, FPM Power Holdings Ltd. (FPMP), to acquire 70 percent of GMR Energy (Singapore).  The remaining 30 percent is owned by Malaysia’s Petronas.

GMR Energy is currently constructing two 400-megawatt LNG combined cycle combustion turbine power plant in Jurong Island, Singapore. The plant is expected to begin commercial operations by December this year.

The investment complements Meralco’s efforts to become a major energy player in the region.

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Lots of Philippine conglomerates has already expanded regionally and Meralco going to that direction as well indicates a good reason to invest in our country. But again as always we cannot accurately predict what will happen to our economy. We all just pray and hope that this positivity and booming economy we are experiencing will continue and this good news with Meralco is the start.

Trade at your own risk, do your due diligence.

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About the blogger

Louis Delos Angeles is a Certified Public Accountant, blogger behind Investing in Philippines, and author of Investing in Stocks: Preparing for the future small amount at a time. Check him out in Google+ Learn more about Louis and his financial freedom advocacy here.

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