Monday, August 30, 2004

August 30 Philippine Stock Market Daily Review: Market Inertia

August 30 Philippine Stock Market Daily Review: Market Inertia

Talk about market inertia…investors practically stayed on the sidelines. Just consider: today’s lean volume of P 399.888 million (US$ 7.14 million) incorporates cross transactions to the tune of P 111.447 million ($US 1.99 million) which represents about 28% of today’s trades, meaning that net of cross trades market volume in domestic currency would amount to a scanty P 288.441 million (US$5.15 million). Moreover, even as foreign capital registered an inflow worth P 29.038 (US$ 519,000), foreign trades accounted for about only a third of the aggregate peso turnover, suggesting that local investors were at helm of today’s activities.

Even as the market was in a state of lethargy which is typical during the week’s start, market internals emitted mixed signals with slightly bullish undertones. First, there were more advancing issues than declining issues (40-32) even as industry subindices were mostly in the red (4 up, 2 down) led once again by the Mining Sector. Second, aside from the net foreign buying, which mostly centered on PLDT (about 75% of the company’s trades accounted for foreign support), on the broader market, foreign capital bought more issues than it sold by almost 2 to 1. In other words, in spite of the ‘crisis’ talk foreigners are still infusing capital to the local equity market although on a cautious pace. Lastly the performances of the major market cap issues or the blue chips were evenly mixed with three advancers (PLDT +.39%, SM Primeholdings +1.75%, and Globe Telecoms +.57%) against three decliners (Metrobank –1.96%, Bank of the Philippine Islands –1.43% and San Miguel B –1.43%) and three unchanged (Ayala Corp., San Miguel A and Ayala Land). The relatively mixed output resulted to the slight decline of the Phisix by 1.63 points or .1%. Well, the Phisix is not alone, Asian bourses are, as of this writing, trading mixed.

Some of last week’s best gainers among the second tier Phisix components issues saw brisk activities with most of them posting continued gains for the day, namely Union Cement +5.66%, Ionics Corp +8.25%, Metro Pacific +6.06%, Music Corporation +8.79%. Only DM Consunji declined by 1.92%.

While foreign money remained at the cautious side of the trade, local investors persisted with speculations on the second tier issues that catapulted these to the top 20 most traded issues. Obviously the market awaits a catalyst or a leader for it resume its climb over a ‘wall of worry’.



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