August 3 Philippine Stock Market Review: The Selling Abates
Selling persisted in today’s activities though on a much-mitigated basis. The object of the last two trading day’s panic, Meralco B finally rebounded by 6.17%, after losing almost as much as 29% in the previous TWO sessions. While Meralco stakeholder, First Philippine Holdings, fumbled anew for the third straight session albeit on a moderated basis by 1.07% on renewed heavy foreign outflow, the Lopez owned natural gas processing energy company contracted by as much as 22% during the past three sessions as the issue touched today’s low of P 22.25 per share, a 5-month level.
The marginal gains of the top telecom issues, PLDT and Globe helped cushion today’s composite index decline of 2.44 points or .16% but was unable to lift the index to positive territory due to the losses of four heavyweights namely San Miguel B (-2.11%), Ayala Corp (-1.81%), Bank of the Philippine Islands (-1.2%) and SM Primeholdings (-1.07%) while San Miguel local shares, Ayala Land and Metrobank were unchanged.
Domestic investors supported today’s market, as overseas capital remained dumbfounded by the latest ruling by the Court of Appeals against Meralco that sent foreign money scouring to the exit doors. Foreign trades constituted about 46% of today’s output while overseas capital recorded a net outflow of P 82.769 million (US $1.478 million) on moderate volume of P 567.414 million (US$ 10.132 million) the outflows were mostly directed at Meralco, First Philippine Holdings and SM Prime even as foreign investors sold more than they bought in the broader market.
Sentiment was mixed with bearish undertones as declining issues edged out advancing issues by 39 to 33, while major sub-indices were majority on the red against only two gainers, the Commercial Industrial Index and the Mining Index which has showed extraordinary resilience and has been approaching its January heights, largely on Manila Mining speculations.
Thus far the Phisix belongs to the minority decliners in the Asian region alongside China, Malaysia, Japan and Thailand while the ten other indices are in surprising green following the rebound in Wall Street, apparently unmoved by yesterday’s threats of the RECORD OIL prices and TERROR scare. Well, CRUDE OIL as of this writing is now at over $44 per barrel!
After three sessions of disgorging Philippine equity assets, the market breadth or market sentiment seems to be on the mend. The difference from the number of advancing issues to declining issues has narrowed meaningfully and could presage for a better advance-decline breadth tomorrow (a probable rally) depending on the persistence of the foreign outflow on the Lopez owned issues. The outflow from Meralco seems to be easing while the intensity of the outflow in First Philippine Holdings is almost at Friday’s level. If local investors could cover the remaining inventories to be liquidated by foreign institutions, who should by now have regained sanity, then we could probably see a sideways movement with bullish bias for the index. As for Meralco and FPH, expect a bearish near term trend as these issues attempt to find a base after the most recent carnage.
Finally, the actions of WALL STREET could provide us some directions despite the low correlation between our markets. So far, US equities have largely ignored the headline news, which are predominantly glum and has moved positively, although one major concern is that rising OIL Prices is on a roll and will continue to haunt investors like scarecrow on the field. Does the recent movements reflects a “Wall of worry” for the US markets to climb or a technical rally due for a selloff?
Selling persisted in today’s activities though on a much-mitigated basis. The object of the last two trading day’s panic, Meralco B finally rebounded by 6.17%, after losing almost as much as 29% in the previous TWO sessions. While Meralco stakeholder, First Philippine Holdings, fumbled anew for the third straight session albeit on a moderated basis by 1.07% on renewed heavy foreign outflow, the Lopez owned natural gas processing energy company contracted by as much as 22% during the past three sessions as the issue touched today’s low of P 22.25 per share, a 5-month level.
The marginal gains of the top telecom issues, PLDT and Globe helped cushion today’s composite index decline of 2.44 points or .16% but was unable to lift the index to positive territory due to the losses of four heavyweights namely San Miguel B (-2.11%), Ayala Corp (-1.81%), Bank of the Philippine Islands (-1.2%) and SM Primeholdings (-1.07%) while San Miguel local shares, Ayala Land and Metrobank were unchanged.
Domestic investors supported today’s market, as overseas capital remained dumbfounded by the latest ruling by the Court of Appeals against Meralco that sent foreign money scouring to the exit doors. Foreign trades constituted about 46% of today’s output while overseas capital recorded a net outflow of P 82.769 million (US $1.478 million) on moderate volume of P 567.414 million (US$ 10.132 million) the outflows were mostly directed at Meralco, First Philippine Holdings and SM Prime even as foreign investors sold more than they bought in the broader market.
Sentiment was mixed with bearish undertones as declining issues edged out advancing issues by 39 to 33, while major sub-indices were majority on the red against only two gainers, the Commercial Industrial Index and the Mining Index which has showed extraordinary resilience and has been approaching its January heights, largely on Manila Mining speculations.
Thus far the Phisix belongs to the minority decliners in the Asian region alongside China, Malaysia, Japan and Thailand while the ten other indices are in surprising green following the rebound in Wall Street, apparently unmoved by yesterday’s threats of the RECORD OIL prices and TERROR scare. Well, CRUDE OIL as of this writing is now at over $44 per barrel!
After three sessions of disgorging Philippine equity assets, the market breadth or market sentiment seems to be on the mend. The difference from the number of advancing issues to declining issues has narrowed meaningfully and could presage for a better advance-decline breadth tomorrow (a probable rally) depending on the persistence of the foreign outflow on the Lopez owned issues. The outflow from Meralco seems to be easing while the intensity of the outflow in First Philippine Holdings is almost at Friday’s level. If local investors could cover the remaining inventories to be liquidated by foreign institutions, who should by now have regained sanity, then we could probably see a sideways movement with bullish bias for the index. As for Meralco and FPH, expect a bearish near term trend as these issues attempt to find a base after the most recent carnage.
Finally, the actions of WALL STREET could provide us some directions despite the low correlation between our markets. So far, US equities have largely ignored the headline news, which are predominantly glum and has moved positively, although one major concern is that rising OIL Prices is on a roll and will continue to haunt investors like scarecrow on the field. Does the recent movements reflects a “Wall of worry” for the US markets to climb or a technical rally due for a selloff?
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