Some in the mainstream have called today’s afternoon rally as ‘bargain hunting’.
In my view, it would be delusional to generalize PERs of 30, 40, 50 and etc… and PBVs at 3,4,6,7 as 'bargain'. More so, an intraday decline .5% based on these valuations hardly changes anything.
Instead I would assess today’s activities as another flagrant example of INDEX massaging.
Bulls as I have been saying are territorial. So, index levels for them are the be-all and end-all in their quest for (an asset inflation) nirvana. They bear the illusions that the higher the level, the more invincible they are--where risks are totally ignored.
So for them, the Phisix must NOT fall at all, because they are supposed to reflect on G-R-O-W-T-H. Thus all attempts must be made to prop it up.
While the Phisix has been down the entire day, what makes today another remarkable session has been what I call ‘afternoon delight’ or the after lunch rally punctuated by “marking the close”. (chart colfinancial and technistock.net)
The modus as I previously explained
Nonetheless, the common trait in the massaging the index, either via intraday “pump” or “marking the close” have been to massively push up prices of at least 3 issues with combined market cap weighting of 15-20%. In panic buying episodes, the kernel of these activities transpire after lunch break.
There had hardly been any ‘bargain hunting’ for the property (upper left) and the holding sector (right) as they had been clearly “pumped up” during the last minute.
Realize that the charts indicated came from losses and had been pushed either to exhibit marginal losses (as in the holding sector) or gains (as in the property sector). (chart from PSE)
Because of the 'afternoon delight' coupled by the end session push, the Phisix down from a low of .5% in the morning session closed the day marginally changed.
And breadth had been in favor of decliners 98-84 which shows of the generally dour sentiment of the day.
I must add that since today’s biggest major cap decliner has Ayala Corporation (-4.88%), the stock operators had to ensure that downside of the holding sector, which AC has been part of, had to be ably managed. So they fired up on the bids of two key issues to offset the decline.
They buoyed the largest and the third largest market cap weighting of the sector. The combined weight for SM (left) and AEV has been 36.64 % (right; weighting based on today’s close) which offset the second largest AC’s 11.38% share.
How about the last minute spurt in the property sector? Well the operators focused their drive on their all time favorite, ALI.
I have also noted above that the Financial sector had been part of the massaging, but apparently, the operators must have shifted to other issues as BPI’s momentum faltered. Were the sellers too heavy for them to control?
The actions of BPI mainly reflected on the index, except for the last minute, where gains came from MBT.
The service sector had a quasi afternoon delight + the last minute pump. Given that TEL lumbered through the day, the focus of the pump transferred to ICT.
Such actions don’t look like random events, rather they seem as calculated and well coordinated. And this has not just been a one day affair but a seeming regularity compared to the 2013 counterpart.
Peso volume today was at a hefty Php 21.09 billion, that’s because 65% of these accounted for special block sales mostly from AC.
These activities are hardly good signs. They are, instead, signs of desperation and more attempts to distort market prices.
They are signs, to re-quote historian Charles Kindleberger, of misconducts:
What matters to us is the revelation of the swindle, fraud, or defalcation. This makes known to the world that things have not been as they should have been, that it is time to stop and see how they truly are. The making known of malfeasance, whether by the arrest or surrender of the miscreant, or by one of those other forms of confession, flight or suicide, is important as a signal that the euphoria has been overdone. The stage of overtrading may well come to an end. The curtain rises on revulsion, and perhaps discredit.
In short, history tell us that the obverse side of every mania and market manipulation has been a crash.
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