Tuesday, July 20, 2004

July 20 Philippine Stock Market Commentary

July 20 Philippine Stock Market Commentary
 
The SOFTENING US equity markets have clearly permeated into Global Bourses, which as of this writing resembles a flickering Rose garden with both the closing Asian bourses and the opening European markets mired in lackluster trading.
 
TEN of the fifteen bourses in Asia are in the red including that of the Phisix which fell for the second day of the week.  The major composite benchmark slipped .73% or 11.26 points as 6 of the 9 index heavyweight issues recorded declines for the day.  Bank of the Philippine Islands (-2.4%), Ayala Land (-1.85%), PLDT (-1.27%), Globe Telecoms (-1.25%), San Miguel local or ‘A’ shares (-.87%) and San Miguel foreign shares (-.87%).  Ayala Corp, Metrobank and Ayala Land were unchanged for the day.
 
Capital flows from foreign investors accounted for only 37.94% of today’s activities and is ostensibly on a DECLINING TREND.  In addition, net money flows from overseas investors posted a negative P 14.069 million.  Trading turnover continues to emaciate as local investors were left to support the market from exiting foreign money; 5 of the 8 index heavyweights manifested net foreign outflows. 
 
Market sentiment was preponderantly bearish, net foreign outflow, decliners beat advancers 40 to 31, and all major sub-indices were in the red except for the Phi-all index which was buoyed by the slight increase of Sunlife and Manulife shares.
 
Trading activities during the past quarter has shown dwindling interest of foreign money on local equity assets, this the Prudent Investor believes as empirical evidence suggests is largely due to evolving global financial and monetary conditions and NOT by domestic political related activities.  Besides the third quarter is usually the leanest season of the stock market, even in the Philippines.
 
The Phisix has broken its 50-day moving averages and points towards possibilities of more renewed weakness than strength, although a technical bounce could not be discounted anytime.  Again it would take local investors to inject more moolah into the market to boost the index than simply fiddle with third liners which have been the case of late.
 
In absence of the propulsion from the market leaders, the Phisix is expected to meander in the immediate term. 
  
  
 

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