Philippine Stock Market Daily Review November 18: Foreign Buying Buoys the Phisix

Foreign Buying Buoys the Phisix

As the US dollar plumbed to its record levels, Philippine equity assets appears to be one of the beneficiaries of global portfolio diversification AWAY from the US-dollar denominated assets. The Phisix climbed an impressive 23.28 points or 1.3% on broad based heavy foreign buying to the tune of P 159.586 million ($2.835 million). Foreign capital participation represented almost half or 48.56% of today’s aggregate output.

Last week, despite the stream of foreign money flows to the Phisix on select sectors, the Philippine benchmark index succumbed to sharp sell-offs. The steep correction led by the telecom sector seemed to have placed the Phisix at the fringe of a seeming ‘inflection point’. However, robust foreign money flows managed to allay the local investors concerns and provided the structural support which apparently averted the market from further declines. As foreign money flows continue to shore up local equity assets fickle local investors appears to have rekindled their interests on the markets, hence the marked improvement in sentiments and the indices.

Significant money inflows were seen in Bank of the Philippine Islands (unchanged), PLDT (+3.8%), which denotes a reversal from the previous streak of foreign selling activities, SM Primeholdings (+4.28%), Jollibee Foods (unchanged), Ayala Corp (+1.53%), JG Summit (+11.1%), Meralco B (+1.02%), Petron Corp (+1.56%) and ABS-Preferred (unchanged). Advancing issues beat declining issues by 38 to 27, while all sectors reported advances with the Mining sector as the laggard, even as GOLD has steadily carved out a series of record breaking (16-year highs) price growth.

The easing of the sell-offs in the telecom sector and the continued foreign money inflows mostly to the banking sector and now spreading to the broader market has been providing the Phisix the necessary support to most probably carry over its ‘year end rally’ due to seasonal strengths, historical patterns and cyclical shifts while the marked decline of the US dollar has provided global investors the fundamentals for diversifying their portfolios to non-US dollar denominated assets as the Philippines.