August 4 Philippine Stock Market Review TELECOMs Boosts Market
Threats of record high levels of crude oil prices apparently rattled and unnerved the US Markets and the skittishness have now permeated into the Global bourses including those of Asia, where only FOUR among the 15 indices in the region are contradictorily manifesting gains. These outliers include the emerging markets of China, Pakistan, South Korea and the Philippines whose composite index or the Phisix climbed 10.88 points or .7% on foreign accumulations into the top telecom issues, PLDT and Globe.
While foreign capital remained a minority in today’s moderate-to-heavy Peso volume turnover valued at P 869.617 million (US$ 15.531 million), its share to total output constituted only 47.21%. Net foreign accumulation accounted for P 116.305 million (US$ 2.077 million) or 13.37% of today’s cumulative turnover even as foreign investors sold more issues than it bought by almost 2 to 1 in the broader market. Furthermore, the mixed market sentiments seen in the foreign money activities was likewise shared by the general market as advancers edged out decliners by a tightrope thin 30 to 29, which we had accurately forecasted yesterday, and industry subindices were largely on the black with only the Banking and Finance index lower for the day.
Although the distribution of capital flows from overseas investors was even at four apiece, among index heavyweight issues, the load of these money inflows were soaked by Globe Telecoms (+2.87%) and PLDT (+2.8%) whose combined output represents 53.91% of today’s turnover, while Property heavyweights Ayala Land (+1.82%) and SM Primeholdings (+3.51%) recorded minor inflows. The rest of the heavyweights, Bank of the Philippine Islands (-1.21%), Metrobank (-1.92%), San Miguel B (-1.43%) and Ayala Corp (-1.85%), reported net outflows.
Meralco B (+3.48%) recorded its second straight day of recovery after last Friday and Monday’s excruciating fall, while affiliate First Philippine Holdings (+3.26%) posted its first day of technical rebound following the mass exodus of foreign investors in the past three successive days. Both issues still reported hefty foreign outflows despite today’s rally meaning that foreign investors have placidly liquidated their positions in a much-tempered manner.
The pressure from the recent sell-offs has gradually abated though its shadows lurk in the market’s backdrop. Foreign selling in the broader market, aside from the Lopez group, was noticeably heavy in the banking and finance sector, of which 6 of the actively traded issues reported outflows and 5 of these posted declines leading its index lower by 1.4%.
Again telecom issues remain as the pillar of the local market, as foreign money, the acknowledged drivers of our index have focused squarely on the sector, almost single-handedly. While we note of ancillary buying in the property sector, the volume for its upkeep is still significantly wanting.
One area of concern is today’s broad sector selloff in the banking and finance industry wherein 6 of the most actively traded issues were all unloaded by foreign investors. Of the 6, 5 posted declines which eventually encumbered on its sector’s index to close lower by 1.4%. It is quite evident that any slowdown in the telecom sector could accelerate equity dispatch by foreign money on the other key blue chips if these momentum are to be sustained, or simply, we could see further downward pressures in the other blue chip companies if the foreign driven-rally in telecom sector tapers off.
The greatly reduced sales pressures in the Lopez owned energy stocks could mean that the foreigners have opted to gradually unload or have nearly exhausted their inventories for liquidation, this can only be established in the coming days if the current levels hold or serves as a floor to the recent panic.
As for the moment, the selloffs in the Lopez-owned energy group have basically been offset by the massive accumulations in the telecom sector, which has rendered the market practically neutral in terms of the market breadth, except that relative to the market cap, the weightings of the telecom issues has lent a bullish tone to the index.
Again on the bright side, the animated trading activities by the local investors has provided a pivotal framework for the market in its entirety to move higher barring another major shock. Today’s massive accumulation by foreign capital is expected to persist in the near term, given the recent breakout in Globe Telecoms, and the accelerating momentum by PLDT to test its recently established highs. A largely improved market breadth should also indicate a bottom for the recently battered Lopez group of energy companies and its recovery should provide the necessary impetus for the Phisix to breach the 1,600-psyclogical resistance level.
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Threats of record high levels of crude oil prices apparently rattled and unnerved the US Markets and the skittishness have now permeated into the Global bourses including those of Asia, where only FOUR among the 15 indices in the region are contradictorily manifesting gains. These outliers include the emerging markets of China, Pakistan, South Korea and the Philippines whose composite index or the Phisix climbed 10.88 points or .7% on foreign accumulations into the top telecom issues, PLDT and Globe.
While foreign capital remained a minority in today’s moderate-to-heavy Peso volume turnover valued at P 869.617 million (US$ 15.531 million), its share to total output constituted only 47.21%. Net foreign accumulation accounted for P 116.305 million (US$ 2.077 million) or 13.37% of today’s cumulative turnover even as foreign investors sold more issues than it bought by almost 2 to 1 in the broader market. Furthermore, the mixed market sentiments seen in the foreign money activities was likewise shared by the general market as advancers edged out decliners by a tightrope thin 30 to 29, which we had accurately forecasted yesterday, and industry subindices were largely on the black with only the Banking and Finance index lower for the day.
Although the distribution of capital flows from overseas investors was even at four apiece, among index heavyweight issues, the load of these money inflows were soaked by Globe Telecoms (+2.87%) and PLDT (+2.8%) whose combined output represents 53.91% of today’s turnover, while Property heavyweights Ayala Land (+1.82%) and SM Primeholdings (+3.51%) recorded minor inflows. The rest of the heavyweights, Bank of the Philippine Islands (-1.21%), Metrobank (-1.92%), San Miguel B (-1.43%) and Ayala Corp (-1.85%), reported net outflows.
Meralco B (+3.48%) recorded its second straight day of recovery after last Friday and Monday’s excruciating fall, while affiliate First Philippine Holdings (+3.26%) posted its first day of technical rebound following the mass exodus of foreign investors in the past three successive days. Both issues still reported hefty foreign outflows despite today’s rally meaning that foreign investors have placidly liquidated their positions in a much-tempered manner.
The pressure from the recent sell-offs has gradually abated though its shadows lurk in the market’s backdrop. Foreign selling in the broader market, aside from the Lopez group, was noticeably heavy in the banking and finance sector, of which 6 of the actively traded issues reported outflows and 5 of these posted declines leading its index lower by 1.4%.
Again telecom issues remain as the pillar of the local market, as foreign money, the acknowledged drivers of our index have focused squarely on the sector, almost single-handedly. While we note of ancillary buying in the property sector, the volume for its upkeep is still significantly wanting.
One area of concern is today’s broad sector selloff in the banking and finance industry wherein 6 of the most actively traded issues were all unloaded by foreign investors. Of the 6, 5 posted declines which eventually encumbered on its sector’s index to close lower by 1.4%. It is quite evident that any slowdown in the telecom sector could accelerate equity dispatch by foreign money on the other key blue chips if these momentum are to be sustained, or simply, we could see further downward pressures in the other blue chip companies if the foreign driven-rally in telecom sector tapers off.
The greatly reduced sales pressures in the Lopez owned energy stocks could mean that the foreigners have opted to gradually unload or have nearly exhausted their inventories for liquidation, this can only be established in the coming days if the current levels hold or serves as a floor to the recent panic.
As for the moment, the selloffs in the Lopez-owned energy group have basically been offset by the massive accumulations in the telecom sector, which has rendered the market practically neutral in terms of the market breadth, except that relative to the market cap, the weightings of the telecom issues has lent a bullish tone to the index.
Again on the bright side, the animated trading activities by the local investors has provided a pivotal framework for the market in its entirety to move higher barring another major shock. Today’s massive accumulation by foreign capital is expected to persist in the near term, given the recent breakout in Globe Telecoms, and the accelerating momentum by PLDT to test its recently established highs. A largely improved market breadth should also indicate a bottom for the recently battered Lopez group of energy companies and its recovery should provide the necessary impetus for the Phisix to breach the 1,600-psyclogical resistance level.
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