It was a gratifying relief for the stock market to start with a high note this year after its disappointing performance during the last trading day of 2011.  With a clean slate, we can now focus our attention to emerging stocks that would give us moderate returns this year.

Data derived from both quantitative and qualitative analyses of my trade partners, major stock brokers, business editor of a leading periodical, and Bloomberg’s business news for the past months showed that the following emerging stocks could be the best performers this year.

Oil Stocks.  During the Asian Summit in Honolulu, Hawaii, President Aquino announced a large oil find in the Philippines.  The President further stated that the area is not within the contested Spratly Islands.  Although no specific area was mentioned, it was widely believed to be the Reed Bank, which is now officially renamed as Recto Bank.  A portion of this area, Service Contract 72, was awarded to UK-based firm Forum Energy Plc, now majority owned by Philex Petroleum Corp. (stock code:  PXP).

The SC 72 contract covers only parts of the Recto Bank and is located about 45 kilometers from the shore of Palawan.  Seismic work had been done, and the final analysis is ongoing.  A portion of SC 72  called Sampaguita prospect was reported to contain as much as three to four trillion cubic feet of gas and potentially 440 million barrels of oil.

The whole service area is believed to host a much bigger deposit of oil and gas than the adjoining Malampaya gas field, the country’s only and largest gas-production field to date. With the current Department of Energy requirement that companies granted service contracts should drill at least one hole within a year, expect aggressive oil drilling to commence soon.  Other potential oil finds are located in service areas  awarded to Trans-Asia Oil and Philippine Overseas.

Based on the above information, I would prefer to have Philex Petroleum, Trans-Asia Oil, and Overseas Petroleum in my portfolio.

Mining Stocks.  The joint venture between Lepanto Mining (stock code: LC/LCB for foreigners) and Gold Fields of South Africa (one of the largest and most profitable gold producers in the world) is aproaching the March 20 target closing date.  The 60/40 joint venture in favor of Gold Fields will definitely increase the share value of Lepanto.  Lepanto’s future value will now be a function of how fast Gold Fields could develop and process the massive ore reserve in the Far Southeast Gold project area.

Philex Mining (stock code:  PX) is another stock to watch.  Its value had been consolidating downward for about a month now.  If we relate this to the  stock’s behavior in the past, this is a normal cycle, especially before it announces its quarterly profits.  I expect this stock to start moving up by February-March.  By April, when its huge 2011 earnings become official, the share value could go up moderately.

Other best mining stocks are those engaged in nickel.  I would definitely recommend Nickel Asia (stock code:  NIKL) as one of the best buys for this year.

Construction and infrastructure stocks will now be energized by the government’s multi-billion-peso infrastructure development program. Combined with Public Private Partnership projects, these stocks will have potentially higher share value for many years to come.

There are nine PPP projects in the initial pipeline. Only two projects will be formalized early this year. They include the P10.4-billion classroom contract and the P1.96-billion Daang Hari-South Luzon Expressway interconnection. The rest of the big-ticket initiatives will follow.

Based on our analyses, these stocks will start their rally this year and  continue for the next three years. Recommended stocks on this counter are cement makers Holcim Philippines Inc. (stock code: HLCM), and Southeast Asia Cement (stock code: CMT).

On the construction sector, I would prefer Equipment Engineering Inc . (stock code:  EEI), D. M. Consunji (stock code:  DMC), and Megawide Construction (stock code:  MWIDE).

On the conglomerate column, the beneficiaries of the infrastructure boom are Ayala Corp (stock code: AC) and Metro Pacific Investments (stock code:  MPI).

If you have questions about my column in particular or the stock market in general, please feel free to contact me by e-mail This e-mail address is being protected from spambots. You need JavaScript enabled to view it. or log on to my blog spot  www.philippinegolddiggers.com.

Till next week.