August 23 The Philippine Stock Market Review: Stock market drivels
Surely today’s decline will be attributed by so-called ‘stock market analysts’ to the forecast prepared by a group of illustrious economist from UP presaging an Argentina and Turkey like crisis brewing in our midst. Well of course, while your analyst do respect the outlook of these pundits, and agree with them on economic risk the country is facing (What more under the FPJ stewardship?), although today’s activities in the stockmarket does not confirm the anxieties impressed upon by the UP study.
First thing in order is to know who would react to such dour outlook, foreigners or locals? Naturally the foreign investors. Since this is an alien land to them learning of such dicey prospects would probably compel them to adversely react on their portfolio holdings in the country. However, given that most of the foreign money invested in the Philippines comes from money institutions, the risk variables to the country, such as political, economic, cultural and others, have already been imputed to their investment decisions as part of the risk premiums. Yet given the still accommodative monetary environment the world is into, such institutions would probably still have the optimal tolerance for risk appetites in the quest for higher yields.
Second, the plight of the Philippines is not an isolated case, even the largest and the most influential economy of the world is almost embroiled in the same quagmire. But of course, one would argue that they are privileged and less affected being that they hold the backbone to the world’s monetary system, the US dollar.
But going back to today’s trading activities, while the locals probably cringed at the “wake up call” (for me) or gloom and doom (for the ‘rationalizing’ analysts) prospects of the Philippine economy, foreign investors infused P 53.882 million ($962 million) to the Philippine Stock Exchange and bought the broader market (bought more issues than it sold by almost 2 to 1). These hard data flies in the face of those who would dare call on today’s decline due to probability of an economic Armageddon which is simply a call to action to those concerned (authorities) that the Philippines has long been walking on a tightrope and is tilted towards losing control.
The Phisix closed lower by 6.66 (bad sign?) points or .42% on lean volume of P 441.395 million or $7.823 million and is one of the minority decliners in the Asian region, whose bourses are mostly higher following the Friday’s rally in Wall Street.
Market sentiment was inclined towards the bears, with declining issues ahead of advancing issues by a tight 35 to 27 and major industry indices are all in the red except for the Oil issues which jumped 6.06% even as crude oil prices corrected from its Friday’s record high of $49.40 per barrel. The Mining sector was the biggest loser even as Gold and Silver rose to their April high levels. What irony! Well, extractive issues are supposedly no brainer investments given that the underlying prices of the commodity/ies should actually determine the economic value of the company that owns or produces them. Unfortunately our market is so puerile that it thrives on gossips and rumors instead of valuations. So much for no brainer investments.
With PLDT (+.39%) the only gainer among the heavyweights, there are three decliners responsible for the drop of the Phisix, namely SM Primeholdings (-1.72%), San Miguel A (-1.72%) and Globe Telecoms (-.59%). Bank of the Philippine Islands, Metrobank, San Miguel B, Ayala Land and Ayala Corp closed neutral.
In sum, foreign capital supported today’s index despite a lower close primarily by locals who sold on some index issues and partially the broader market. As to what compelled the locals to sell is probably out of profit taking or sheer lethargy. So much for the stock market drivels.
Surely today’s decline will be attributed by so-called ‘stock market analysts’ to the forecast prepared by a group of illustrious economist from UP presaging an Argentina and Turkey like crisis brewing in our midst. Well of course, while your analyst do respect the outlook of these pundits, and agree with them on economic risk the country is facing (What more under the FPJ stewardship?), although today’s activities in the stockmarket does not confirm the anxieties impressed upon by the UP study.
First thing in order is to know who would react to such dour outlook, foreigners or locals? Naturally the foreign investors. Since this is an alien land to them learning of such dicey prospects would probably compel them to adversely react on their portfolio holdings in the country. However, given that most of the foreign money invested in the Philippines comes from money institutions, the risk variables to the country, such as political, economic, cultural and others, have already been imputed to their investment decisions as part of the risk premiums. Yet given the still accommodative monetary environment the world is into, such institutions would probably still have the optimal tolerance for risk appetites in the quest for higher yields.
Second, the plight of the Philippines is not an isolated case, even the largest and the most influential economy of the world is almost embroiled in the same quagmire. But of course, one would argue that they are privileged and less affected being that they hold the backbone to the world’s monetary system, the US dollar.
But going back to today’s trading activities, while the locals probably cringed at the “wake up call” (for me) or gloom and doom (for the ‘rationalizing’ analysts) prospects of the Philippine economy, foreign investors infused P 53.882 million ($962 million) to the Philippine Stock Exchange and bought the broader market (bought more issues than it sold by almost 2 to 1). These hard data flies in the face of those who would dare call on today’s decline due to probability of an economic Armageddon which is simply a call to action to those concerned (authorities) that the Philippines has long been walking on a tightrope and is tilted towards losing control.
The Phisix closed lower by 6.66 (bad sign?) points or .42% on lean volume of P 441.395 million or $7.823 million and is one of the minority decliners in the Asian region, whose bourses are mostly higher following the Friday’s rally in Wall Street.
Market sentiment was inclined towards the bears, with declining issues ahead of advancing issues by a tight 35 to 27 and major industry indices are all in the red except for the Oil issues which jumped 6.06% even as crude oil prices corrected from its Friday’s record high of $49.40 per barrel. The Mining sector was the biggest loser even as Gold and Silver rose to their April high levels. What irony! Well, extractive issues are supposedly no brainer investments given that the underlying prices of the commodity/ies should actually determine the economic value of the company that owns or produces them. Unfortunately our market is so puerile that it thrives on gossips and rumors instead of valuations. So much for no brainer investments.
With PLDT (+.39%) the only gainer among the heavyweights, there are three decliners responsible for the drop of the Phisix, namely SM Primeholdings (-1.72%), San Miguel A (-1.72%) and Globe Telecoms (-.59%). Bank of the Philippine Islands, Metrobank, San Miguel B, Ayala Land and Ayala Corp closed neutral.
In sum, foreign capital supported today’s index despite a lower close primarily by locals who sold on some index issues and partially the broader market. As to what compelled the locals to sell is probably out of profit taking or sheer lethargy. So much for the stock market drivels.
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