July 9 The Philippine Stock Market Review

July 9 The Philippine Stock Market Review


Local investors were on selling spree as the Philippine equity market resumed its consolidation. The 30 company composite bellwether slipped a slight on .19% or 3.01 points as three index heavyweights decliners, namely Metrobank (-1.81%), SM Primeholdings (-1.61%) and San Miguel foreign or B shares (-1.42%) pounded on the sole advancer Ayala Corp (+1.81%). Ayala Land, Globe Telecoms, San Miguel local or A shares, Bank of the Philippine Islands and PLDT closed unchanged.

Declining issues led advancing issues 44 to 27, while industry indices were all in the red except for the mining index, portraying a broad market sell off in today’s trading. Aside, foreign capital saw more liquidations than accumulations although net foreign capital reported a positive P 36.149 million of inflows mostly due to the large acquisitions PLDT shares. Foreign trading activities contributed nearly three-fourths or 74.5% of today’s aggregate output, which suggests that foreign buying on select issues buoyed the market as most local investors reduced their portfolio positions or stayed on the sidelines.

The most conspicuous losers were the oil issues represented by its index that dived by a horrid 11.05%. Oriental Petroleum the index’s largest market cap crumbled by 9.09% while its Foreign or B shares collapsed by 13.04%. Philodrill, the second largest component of the index, saw its local shares stumble by 9.09% while its foreign shares crashed by 18.51%. Both of these companies are participants in the latest oil drilling project the Service Contract 41 led by the US energy company UNOCAL consortium at the Sandakan Basin in the Sulu Sea. Basic Consolidated another key participant likewise saw its shares shrivel by 11.76%. The frenetic selling could probably be due to insider information on the status of the oil drilling. This could be interpreted as a possible negative find in its second well, the Rhino-1. Curiously though, while the drilling has yet to hit its desired depth, as of July 7th, according to the DOE, “gas readings of 67,200 ppm or 336 units and 74,600 ppm or 382 units were encountered while drilling the well at a measured depth of 4,500 and 4,454 feet, respectively”, since these are engineering data and beyond our ambit of expertise for discernment, by the market’s response to the news, it may be well assumed that the disclosure probably signifies insufficient or non-commercial quantity of gas finds. However, once again, the targeted distance has yet to be reached by the consortium.