July 22 Philippine Stock Market Commentary

July 22 Philippine Stock Market Commentary
 
Our forecast that the US markets would rally due to the optimistic assessment by the US FED Chair Alan Greenspan boomeranged due to the weaker-than-expected corporate earnings specially affecting the TECHNOLOGY sector.  Nonetheless, the underpinning sanguine outlook of the local investors in the Philippine market once again boosted the key index benchmark to defy the regional sentiments weighed upon by the last night’s flogging of the US equity markets.  As of this writing 10 of the 15 indices of the Asian region are in the red.
 
The Philippine composite index, the Phisix rose a modest 13.47 points or .88% on lean volume, as local investors shored up the broader market while foreign buying remerged on select index heavyweights. 
 
Foreign capital inflows reappeared as today’s activities recorded a moderate P 57.813 million worth of equity asset acquisitions, while foreign trading activities accounted for 31.31% of accrued output.  Once again overseas investors directed the bulk of these inflows to PLDT (+1.7%) where 66% of today’s the company’s turnover were credited to foreign money.  The other major recipients of foreign capital were Jollibee (unchanged), Ginebra San Miguel (+1.72%) and First Philippine Holdings (unchanged). 
 
Aside from PLDT, two other major index components helped buoyed the Phisix, these are local-driven technically-oversold Globe Telecoms (+2.53%) and Ayala Land (+1.88%).  The rest of the heavyweights were neutral at best.
 
Once again market sentiment was largely in favor of the bulls as advancing issues whipped declining issues 39 to 28 while industry sub-indices were all higher except for the OIL index which closed unchanged. 
 
The market has shown a MINOR shift in gears, as foreign capital, despite the diminishing presence marked by the lower percentage share to total output (6th successive trading day below the 50% mark), has seemingly RENEWED its gradual and selective accumulation phase, REVERSING the outflows during the recent sessions or particularly the past week.  On the other hand the local punters have continued with its reshuffling ‘speculative’ activities reactivating moribund second and third tier issues on ‘tall tales’ or ‘insider triggered’ speculations with today’s 122 issues traded the 24th in 25 sessions.  A look at the top gainers list we have Gotesco Land ‘A’ (+50%), Gotesco Land ‘B’ (+46.66%), Alson Consolidated (+44.44%), ersatz bubble ‘BW’ now Fairmont holdings (+18.51%), Liberty Telecoms (+14.28%), call center Fil-Hispano (+14.28%), MRC Allied (+14.28%), AJO.net (+13.04%), PICOP Resources (+13.04%) and First Metro Investment Corp (11.76%). 
 
Well of course, trading based on ‘insider tips’ or ‘blah blah’ tales is a hazardous proposition considering that you might be at the tail end of the ‘word of mouth/tale’ cycle where insiders/insider associates, who spawned these nefarious activities, would be selling for profits while the ‘greater fool’ would be buying and left holding an empty bag.
 
Today’s trading environment is definitely distinct in contrast to the recent years where foreign money was the main catalyst to the directional flows of the market.  In other words, your portfolio could be adjusted to focus on ‘plays’ that have shown consistency in its price movement trends and supported by contingent measures to reduce losses.