July 20, 2005 A Renewal of Confidence on the Phisix?

July 20, 2005 A Renewal of Confidence on the Phisix?

Today’s market activities was a pleasant surprise, the Phisix zoomed by 55.16 points or 2.92% powered by foreign capital accumulation on key heavyweight issues to lead Asia’s mostly buoyant bourses.

Foreign money accounted for nearly 70% of today’s turnover with net accumulation of P 105.331 million representing about 8.7% of total trades. Major heavyweights recorded significant gains led by San Miguel B shares up 7.44%, Ayala Corp higher by 6.77%, SM Primeholdings 4.28%, Ayala Land 2.59%, Globe Telecoms 2.4%, Bank of the Philippine Islands 2.04%, PLDT 1.96% and San Miguel A 1.02%. Only Metrobank among the 8 major issues recorded a decline, down 1.81% to 27.

Among the 8 major issues, foreign flows was evenly divided, nevertheless there were more inflows seen on a net basis to companies that accounted for inflows while the broad market benefited from the spillover. Second tier issues which benefited from the spillover buying included Jollibee Foods Corp. up 6.55%, First Philippine Holdings up 3.57%, Meralco B 2.08%, Petron Corp 1.66%, Aboitiz Equity Ventures 1.02% and Manila Water Corp. 1.53%, notably most of the operations of these issues were on either power or infrastructure.

Another noteworthy factor is that while advancers led decliners by more than 3 to 1, the broad market activities showed up with less interest from local investors as number of issues traded remained below the active levels. So far, it appears that the most of the buying activities had been directed towards the heavyweights and its peripheries. The ‘speculative’ issues are expected to benefit from a sectoral rotation if these perky activities persist.

Except for the Mining industry which was the only sector that recorded a slight decline, all other sectors were in the green led by the property sector up by 3.38% and closely followed by the Commercial Industrial Index higher 3.12%.

Renewal of confidence on the Phisix?

The chart above of the Phisix exhibiting today’s vibrant performance almost parallel to its early June outperformance. The current gains brings the Phisix back the key levels it previously lost which implies that the Philippine benchmark may be back on its secular upside trend.

Again in my view, today’s action emanates from the sanguine sentiment of global bourses (discussed in my weekly newsletter) which practically upstaged the antsy developments in the domestic political arena.

Benson