Phisix: Another Panic Buying Day amidst Global Stock Market Meltdown January 6th Edition

Well, this would mark the third time where, in the face of a global stock market meltdown, team OPLAN 7,400 or the index managers have pumped the index to close the trading day unchanged. 

The first was in October 16 and the second in December 15th. The operations come with the same features, pumping of select issues to buoy the index as global markets fizzled.

Across East Asia (table from Bloomberg), except for bourses of China, Vietnam and the Philippines, the region had mostly been bloodied from a contagion by the sharp selloff in Europe and in Wall Street. 

The Phisix opened today with modest losses which accrued early in the session. But apparently corrections are considered impermissible for the establishment who sees domestic stocks as a one way street. So the cabal of index manipulators went into action. They pumped up or engaged in manic bidding up of prices of exceedingly overpriced key index issues in order to ensure that confidence in the Philippine stock exchange will be maintained. 

The pumping actions lifted the index to erase about more than half of the early day’s losses going through the lunch recess. (charts from technistock.net and colfinancial) 

The ‘afternoon delight’ scheme went into operations but apparently wasn’t successful enough to lift the index significantly into positive territory as momentum faded during the near close as in the previous days. 

Nonetheless index managers secured the day with a “marking the close” for an unchanged Phisix.

Today’s pump had been centered on mainly three sectors, finance (left), commercial industrial  (middle) and holding (right). The most apparent use of the marking the close can be seen in the holding sector.

Combined these four issues from the aforementioned sectors constitute 18.63% of the Phisix market cap as of today’s closing. As I have been pointing out here, all it takes has been to move 3-4 issues with about 20% of market cap to manage the index.

Peso volume was moderate at Php 9.95 billion which with special block sales totaled Php 10.431 billion. Decliners led advancers 98 to 84 as foreign selling hit Php 1.144 billion (PSE Quote) partly revealing of the profit taking mode divergent from the index outcome.

It’s interesting to see the need for an artificial prop in order to achieve its bullmarket stature. Yet this has been more of a sign of desperation. 

Nevertheless, the obverse side of every mania is a crash.