July 27 Philippine Stock Market Commentary

July 27 Philippine Stock Market Commentary

The contained damage in the US markets gave an opening for the Bulls to seize the initiative and boost the main Philippine composite index by 17.64 points or 1.14%.  Today’s move practically recouped or zeroed out the losses incurred from yesterday with a small change left for gains.  In chart lingo, today’s candlestick shows a semblance of an ‘outside day’ reversal formation which suggests of a potential reversal from the current weaknesses or denotes of a bullish undertone for the coming sessions, although the rather lean volume indicates that the chirpy outlook would probably be less pronounced.

Despite the vibrant gains of the benchmark index, volume turnover in local currency was relatively benign at P 362.599 million.  Sentiment indicators were mostly positive, namely, advancers outpaced decliners 39 to 28, foreign capital recorded a net inflow of P 41.388 million mostly directed at PLDT, foreign investors bought one company more than it sold, while industry indices were mixed with the ALL index down, due to the Sunlife’s decline, and the extractives sectors were sold out by the local investors.

SIX of the 9 heavy cap issues posted gains against 3 unchanged.  Bank of the Philippine Islands reversed yesterday’s anomalous steep decline with a considerable 2.5% gain, meanwhile, PROPERTY heavyweights Ayala LAND and SM Primeholdings were today’s top-heavy cap advancers which added 3.77% and 3.5% respectively.  Major Telcos equally buoyed the index PLDT up by 1.65% and Globe higher by .6%.  Lastly Ayala Corp nudged higher by 1.89% on a MEASLY P 80,700 worth of trades.

Well, the PHISIX surfed the wave of optimism among Asian bourses with about 10 of the 15 bourses trading on the upside, as of this writing.  It seems that the Philippines will be today’s second top gainer following the Taiwan’s Taiwan Weighted which is up 1.25%.  The rest of the region are trading on thin margins and could be swayed to either side except for Japan whose Nikkei 225 is likely to close lower as it is down by 1.05%.

DOMESTIC investors have again ramped up their speculative activities with Taipan Lucio Tan’s companies being the top winners for the day; Baguio Gold hit the PSE-imposed price ceiling after surging by 50% followed by Macroasia Corporation which jumped 37.03% on a follow through from last week’s remarkable 64.5% advance most PROBABLY due to its recent disclosure that the company intends to revive its nickel mines in Palawan.  Other the other winners for today were Centro Escolar University (+27.27%), Fairmont holdings formerly the controversial BW (+12.9%), Araneta Properties (+12.5%), Vantage Holdings (+12.5%), Yuchengco construction Engineering Equipment Inc. (+10%), Uniwide Holdings (+9.37%), Prime Orion (+6.45%) and Philodrill B (+5.0%).

The number of traded issues equaled the highest level touched last July 21st at 124, demonstrative of the continuing optimistic outlook by the local investors. As we have noted previously, only FOREIGN INITIATED accumulations could conspicuously ratchet up the major benchmark index considering the volume slack by the local investors, who prefer to fiddle with third tier or issues. As in today’s case, foreign take up to total volume was at 44.53%, hence the slim volume despite the sizable uptick.  In spite of these, the MASSIVE INFLOWS to the PRIVILEGED FEW like PLDT, Globe Telecoms and Ayala Land sparked a wave of bargain hunting that spilled over to the rest of the blue chips and to the broader market.

Lastly as noted in the past,  it pays to keep a close watch on the US markets for any major tremors that could unsettle the global bourses, including ours.