June 24, 2004 Philippine Stock Market Review

After a vivacious start, the Phisix succumbed to a late day selling which could be characterized as profit taking on a “sell on news”.

Recall that since the onset of the election campaign period in February the Phisix have climbed by as much as 8.04% in April 28th which probably means that the market has factored in a peaceful conclusion to the national elections with a victory by the incumbent administration.

Today’s early morning proclamation for PGMA and VP De Castro basically put to fact to these anticipations hence, the mixed performance among heavyweights leading to the marginal rise (.02%) of the benchmark Phisix.

Of the eight index heavyweights that comprise more than 75% of the Phisix, three issues advanced, four issues declined while 2 remained unchanged. Key telecom issues PLDT (+.89%) and Globe Telecoms (+.58%) together with Ayala Land (+1.81%) cushioned the declines of Ayala Corp. (-1.75%), San Miguel B (-.68%), SM Primeholdings (-1.66%) and Metrobank (-1.78%). Meanwhile, San Miguel local shares and Bank of the Philippine Islands closed unchanged.

Incidentally, PLDT has surpassed or overtaken San Miguel Corporation as the largest listed company based on market capitalization on the Phisix. As of today’s close PLDT constitutes 17.48% of the 30-company benchmark, with the combined San Miguel shares accounting for 16.52% and the third spot going to the telecom issue, Globe Telecoms which took up 11.04%.

Despite the rather mixed performance of the index as reflected by the major index heavyweights, overall market breadth showed underlying bullishness with advancing issues dominating declining issues by almost 2 to 1, i.e. 42 to 24.

Moreover, the number of traded issues have reached past 100 (exactly 119 today) for the fifth consecutive trading day which means investors optimism have prompted for a broader degree of accumulations.

Furthermore, foreign money, which made up half of today’s turnover, remained on a bullish note injecting some P 47.680 million worth of equity asset acquisitions.

If these underlying bullishness should prevail in addition to the accelerating upside momentum, crossing the April 28th threshold of the 1,610 to 1,620 level could be sooner than expected.

Benson Te