July 6 The Philippine Stock Market Review

After a rather soft opening the Philippine benchmark index, the Phisix, firmed during late trading to end the day higher by 1.02 points or .06%.

PLDT resumed its upbeat momentum up .4% but this time aided by gains from the banking heavyweights Metrobank up 1.85% and Bank of the Philippine Islands higher 1.19%. San Miguel shares moved in opposite directions as its Foreign and Local shares slumped by a nasty 2.73% while its local shares strengthened by .86%. In short the big drop of San Miguel B shares were offset by the gains of its local or ‘A’ shares combined with the gains of BPI, Metrobank and PLDT which resulted to the slight gain of the major composite index. In the 30-company (listed as 33 due to the B shares) composite index 11 advanced, 7 declined while 15 were unchanged.

Market breadth remained cautiously bullish as advancers beat decliners by 35 to 29, while among the industry sub indices, three recorded gains (Banking and Finance, Phi-ALL and Mining) against three decliners (Commercial and Industrial, Oil and Property Index).

Foreign money posted a slim net inflow of P 13.134 million on selective buying. Once again the meat of these money flows were directed to PLDT while moderate inflows were seen in First Philippine Holdings, Ayala Land and Megaworld Corp. However, in the broader market overseas money sold more issues than they acquired, hence the phrase ‘selective buying’. Foreign trades accounted for 53% of the accrued turnover.

This has been the 13th straight session that the Philippine bourse traded more than the 100-issue threshold, beating the June and July 2003 levels, which if you recall was the period whence the 2003 rally commenced. Considering the premise that most investors are likely to hold on to a losing stock rather than to sell them, trading the broader market means more buying than selling. Well in support of this thesis, during the said period June 18 to date, the market has climbed 3.31%. Advancers beat decliners 472 to 322 with an average trade of 108 issues a day. Moreover, foreign inflow was a paltry P 183.201 million with foreign trades accounting for a slight majority 53.54% of total output. Remember the propulsion to last year’s run had been foreign moolah, today we are seeing local investors anteing up and substituting the palpable declines from foreign capital. No, the issue of declining foreign investments are not due to internal concerns as cynics would like to put but it on global monetary and fiscal developments. (Read more on the supplemental posting below).

Finally, the general sentiment seen in today's market activities could probably be in line with that of our neighbors, most of the region’s bourses are up with sharp advances seen in Indonesia (post election), Taiwan and Singapore. The only decliners in the region, as of this writing, are New Zealand, SRI Lanka and Japan.