As URC Crashes Back to Bear Market, SM Companies Used as Defense of 8,000 Maginot Line!

When the cost of an activity declines, people do more of that activity.

Let us apply this to what has become regular events at the PSE

When the cost of manipulating markets diminishes, unscrupulous/price fixing activities proliferate.

There is no greater example than the fantastic pricing fixing scheme being conducted at the Philippine Stock Exchange in order to defend the 8,000 Maginot line.

Today’s action was even more ferocious than yesterday’s.

 

But there was a difference; absent in today’s actions was the afternoon delight pump. And in its stead was an afternoon slomo dump. Nevertheless, what substituted for the missing afternoon delight was a fierce“marking the close”!

The PSEi was down .173% or by 13.8 points just a second prior to the market intervention phase. Then all of sudden…boom…the PSEi was up by 23.21 points or .29%. The entire pump was 37 points. Today the Phisix gained by 23.21 points. So a huge 37 points or .46% was needed to reverse pre closing marginal losses which had miraculously been transformed into a hefty .29% advance!

Only in the Philippines!

 

Again all these required coordinated and synchronized pumps on key big issues from several sectors. Today, again the firms involved were from the biggest sector, the holding, the most popular, the property and its financier, banking.

 

Interestingly, the biggest of the pumps occurred at SM companies! 

SM, the largest listed firm with 10.62% of market cap weight share of the PSEi, was pumped by an eye popping 1.75% to deliver the day’s stunning 1.61% gains. It was like Midas Touch, red turned into gold! 

Property subsidiary SMPH, with a market cap weight of 7.31%, was pumped 1.54% to lop off 65% of the day’s losses to just .84%.

Meanwhile, 79.5% of the .88% advance of SM bank subsidiary BDO, with a market cap weight of5.21%, was from a .7% pump.

In total SM companies alone accounted for 23.14% of the PSEi's market cap

Marking the close also reversed JGS’s loss to gains

These pumps happened because, like yesterday, several key PSEi issues were under selling pressure.

URC was yesterday (-4.2%) and today’s biggest loser (-3.92%) among the top 15 largest index issues. Aside from URC today were GTCAP (-2.6%), ALI (-95%) and AC (-.44%)  

So the Maginot line was successfully defended today despite some emergent signs of selling pressures

 

Another interesting phenomenon; URC’s two day plunge has brought it back to touch bear market level. Question is why? Especially why when 2Q and 1H eps growth soared by 21% and 26% correspondingly. Could it because of a frail topline growth of only 2.04% and 4.2%, respectively, which made those growth numbers fragile? 

Or could it be because some may have perceived that those eps growth numbers have been inflated, thereby unsustainable?

URC seems to defy the record breaking run by several issues in the PSEi. Two issues carved new highs last week for a total of 5 issues in August. Although of course, URC had its own vertical move last March to April

 

Interestingly too, two other previously high (vertical) flying issues, AEV and JGS appear to be either weakening or consolidating. Question is why again?

Could it be that all three have been set up for a rotation—pause today so as to regain energy and then pumptomorrow or in the immediate future—in order to supplement the present leaders (to attain the BW-SSO final phase)? Or could this be signs of cracks in the historical meltup?

Of course, current developments only reveals of how another historical event is in the making.