August 25 The Philippine Stock Market Review: Dead Cat Bounce?
After being spooked by the ‘Crisis’ talk, local investors regained some sensibilities and bargain hunted on the domestic equity market, as officials moved to assuage concerns of the investing public on the country’s ability to meet its debt payments. The Phisix climbed a measly 6.07 points or .39% after yesterday’s brutal thrashing. While your analyst is disinclined to oversimplify the recent events to the market’s short-term movements, the shocking admission by no less than the Philippine President on the gravity of the country’s chronic economic conditions cast a pall on the attractiveness of investments in the country, hence in the short-term the ‘risk’ issue becomes the primordial wall of worry from which the bulls has to climb.
Today’s market activities reflected such skepticism. As we earlier mentioned first to ever react would be foreign investors as lugubrious prospects would increase risk considerations of their portfolio relative to benefits hence any shocking revelations could spur a sudden exodus from the market. While yesterday’s activities manifested a tempered reaction from the foreigners, today we noticed significant volume increase of these liquidations, which amounted to P 71.648 million, or almost equivalent to 11.9% of aggregate volume. Foreign trades constituted 61% of today’s output while selling two times more issue than it bought.
SIX of the eight heavyweights scored a net outflow from foreign capital with the most notable outflow seen in Ayala Corp (unchanged), almost 45% of its output and represents about 50% of the net outflow, joined by moderate selloffs in SM Primeholdings (+1.75%), PLDT (-.39%), and Ayala Land (-1.88%) while Bank of the Philippine Islands (+1.25%) and Metrobank (+2.0%) posted negligible selling. Only Globe Telecoms (unchanged) recorded positive flows from overseas money while San Miguel B (unchanged) had no foreign trades.
Other noteworthy foreign activities are the continuing intensive selling on Filinvest Land (-1.07%) accounting for 75% of its trades, and the modest accumulations in ABS-CBN Preferred shares (unchanged) representing about 17% of its output and First Philippine holdings (+2.06%) about 27.58% of the firms trades.
Sentiment was biased towards the bulls with advancing issues ahead of declining issues by 35 to 20 and the major industry indices were higher led by the rebound of the mining sector while Oil and the property index posted losses.
Yesterday’s major trendline breach was a cause of concern, while today’s rally hardly made a significant headway to regain lost grounds, meaning that today’s run up could be construed as temporary or a dead cat bounce. As gauge, the former support level is now its resistance level and has to be credibly taken out backed by sizable volume. However, with the past two day’s performance of having foreign money taking on the selling side of the trade equation, it would need a lot of firepower from the locals to repulse the seemingly strengthening bears, and to hold or buoy the index from its current levels.
After being spooked by the ‘Crisis’ talk, local investors regained some sensibilities and bargain hunted on the domestic equity market, as officials moved to assuage concerns of the investing public on the country’s ability to meet its debt payments. The Phisix climbed a measly 6.07 points or .39% after yesterday’s brutal thrashing. While your analyst is disinclined to oversimplify the recent events to the market’s short-term movements, the shocking admission by no less than the Philippine President on the gravity of the country’s chronic economic conditions cast a pall on the attractiveness of investments in the country, hence in the short-term the ‘risk’ issue becomes the primordial wall of worry from which the bulls has to climb.
Today’s market activities reflected such skepticism. As we earlier mentioned first to ever react would be foreign investors as lugubrious prospects would increase risk considerations of their portfolio relative to benefits hence any shocking revelations could spur a sudden exodus from the market. While yesterday’s activities manifested a tempered reaction from the foreigners, today we noticed significant volume increase of these liquidations, which amounted to P 71.648 million, or almost equivalent to 11.9% of aggregate volume. Foreign trades constituted 61% of today’s output while selling two times more issue than it bought.
SIX of the eight heavyweights scored a net outflow from foreign capital with the most notable outflow seen in Ayala Corp (unchanged), almost 45% of its output and represents about 50% of the net outflow, joined by moderate selloffs in SM Primeholdings (+1.75%), PLDT (-.39%), and Ayala Land (-1.88%) while Bank of the Philippine Islands (+1.25%) and Metrobank (+2.0%) posted negligible selling. Only Globe Telecoms (unchanged) recorded positive flows from overseas money while San Miguel B (unchanged) had no foreign trades.
Other noteworthy foreign activities are the continuing intensive selling on Filinvest Land (-1.07%) accounting for 75% of its trades, and the modest accumulations in ABS-CBN Preferred shares (unchanged) representing about 17% of its output and First Philippine holdings (+2.06%) about 27.58% of the firms trades.
Sentiment was biased towards the bulls with advancing issues ahead of declining issues by 35 to 20 and the major industry indices were higher led by the rebound of the mining sector while Oil and the property index posted losses.
Yesterday’s major trendline breach was a cause of concern, while today’s rally hardly made a significant headway to regain lost grounds, meaning that today’s run up could be construed as temporary or a dead cat bounce. As gauge, the former support level is now its resistance level and has to be credibly taken out backed by sizable volume. However, with the past two day’s performance of having foreign money taking on the selling side of the trade equation, it would need a lot of firepower from the locals to repulse the seemingly strengthening bears, and to hold or buoy the index from its current levels.
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