Philippine Stock Market Daily Review: Oct 21, 2004
Phisix Crumbles Under the Weight of Local Selling
No, I certainly would not ascribe to any particular event solely responsible for the current drag in the Phisix, down 18.33 points or 1.03%, which has broken from an important support level. The 1,770-level served as its platform to establish its most recent record high. The motley reasons that you can expect from mainstream analyst to cite for the recent string of declines would be overnight decline of the US markets, oil (again!! No rotation to oils), local political developments as coup fears arising from corruption crackdown on military hierarchy, economic data, Metro Pacific-driven et. al. and a whole lot of crap.
While these experts presume knowing the mindsets of the market, what we can deduce from the market is what the market internals show. And today’s activities manifest glum outlook by locals responsible for the recent declines.
No, I certainly would not ascribe to any particular event solely responsible for the current drag in the Phisix, down 18.33 points or 1.03%, which has broken from an important support level. The 1,770-level served as its platform to establish its most recent record high. The motley reasons that you can expect from mainstream analyst to cite for the recent string of declines would be overnight decline of the US markets, oil (again!! No rotation to oils), local political developments as coup fears arising from corruption crackdown on military hierarchy, economic data, Metro Pacific-driven et. al. and a whole lot of crap.
While these experts presume knowing the mindsets of the market, what we can deduce from the market is what the market internals show. And today’s activities manifest glum outlook by locals responsible for the recent declines.
The Phisix has retraced by more than 23.6% and could probably test the 1,740 level for a 38% correction/retracement from its recent highs before moving higher.
Today’s action was centered on the sell off in the telecoms sector with key heavyweights (PLDT down 2.13% and Globe lower 1.9%) and attendant second liners taking the most damage, Piltel fell 2.41% and Digitel declined 4.34%. The Mining sector was the biggest loser (-1.4%) even as metal prices underpinning the corporate fundamentals such as gold and silver are currently approaching their record highs in dollar terms. The financial sector (-1.33%), weighed by losses from its heavyweights Bank of the Philippine Islands (-2.12%) and Metrobank (-1.8%), came second while the telecom led Commercial Industrial Index (-1.22%) was third. The All Index posted the least decline down by .32% as its heavyweights Sunlife and Manulife were untraded today. The foreign supported property sector (+.4%) defied the market sentiment and posted slight gains for today largely on SM Prime’s advance (+1.38%).
Decliners led advancers by 53 to 15, as foreign money remained bullish on local equity assets particularly on the property sector to register P 111.868 million worth of inflows. Foreign trades accounted for only about 37% of today’s trades, meaning that the psychology of the local investors dictated the tempo of the trading activities in today’s market. ERGO Locals are selling for whatever reasons, Foreign are buying for reasons stated previously in our newsletters.
The September-October period statistically speaking has been one of the weakest period on a month on month basis aside from the July-August and June-July time frame since 1997. Five out of seven months in the past 7 years or a probability of 71.4% showed that the September-October period is predominantly a bear’s lair, although month to date the Phisix is barely up by 5.03 points or .3% which simply means that it is natural to expect the Phisix to head lower because of seasonality factors paving way for strengths in the coming months. Take these indications of weaknesses as opportunity to buy on dips, as I believe that the cyclical shifts, seasonality factors, historical patterns and the technical picture remains tilted in favor of the bulls.
Today’s action was centered on the sell off in the telecoms sector with key heavyweights (PLDT down 2.13% and Globe lower 1.9%) and attendant second liners taking the most damage, Piltel fell 2.41% and Digitel declined 4.34%. The Mining sector was the biggest loser (-1.4%) even as metal prices underpinning the corporate fundamentals such as gold and silver are currently approaching their record highs in dollar terms. The financial sector (-1.33%), weighed by losses from its heavyweights Bank of the Philippine Islands (-2.12%) and Metrobank (-1.8%), came second while the telecom led Commercial Industrial Index (-1.22%) was third. The All Index posted the least decline down by .32% as its heavyweights Sunlife and Manulife were untraded today. The foreign supported property sector (+.4%) defied the market sentiment and posted slight gains for today largely on SM Prime’s advance (+1.38%).
Decliners led advancers by 53 to 15, as foreign money remained bullish on local equity assets particularly on the property sector to register P 111.868 million worth of inflows. Foreign trades accounted for only about 37% of today’s trades, meaning that the psychology of the local investors dictated the tempo of the trading activities in today’s market. ERGO Locals are selling for whatever reasons, Foreign are buying for reasons stated previously in our newsletters.
The September-October period statistically speaking has been one of the weakest period on a month on month basis aside from the July-August and June-July time frame since 1997. Five out of seven months in the past 7 years or a probability of 71.4% showed that the September-October period is predominantly a bear’s lair, although month to date the Phisix is barely up by 5.03 points or .3% which simply means that it is natural to expect the Phisix to head lower because of seasonality factors paving way for strengths in the coming months. Take these indications of weaknesses as opportunity to buy on dips, as I believe that the cyclical shifts, seasonality factors, historical patterns and the technical picture remains tilted in favor of the bulls.
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