Monday, August 15, 2016

PSEi 7,960: Operation Defend the Maginot 8,000 Line In Action Today (August 15)!

It’s truly amusing to witness how desperate and brazen some entities have been at gaming the system.

 
As I have been saying here, PSEi 8,000 has served as the proverbial Maginot Line, a critical fortification that has to be defended AT ALL COST.

And even if the headline index has been drifting below the 8,000 critical threshold, it must remain within striking range.

And that’s the story of the day.

In order to push the PSEi it requires coordinated actions on several key heavyweight issues.

So as the PSEi touched the 7,900 at about 230 pm, a massive synchronized ‘afternoon delight’ pump became operational. The synchronized pumping action had been centered on issues from three sectors led by the property sector.
 
Additionally the property sector carried the weight of the campaign to push the PSEi to the green.

And the late afternoon delight pump had to end with a climax: marking the close!

Because the property sector carried the weight of the afternoon delight pump, it needed back up. Thus some firms from the holding sector delivered the gist of the last minute gains
 
So marking the close pushed AC by 1% and this reversed the intraday losses, so AC ended the day instead up by .67%. JGS was also pumped by 1.04%, which again overturned the day’s deficit to close the day up by .73%!

Almost half or 49.45% of ALI’s 1.94% was a product of marking the close. PLDT’s .86% closing minute pump overhauled the price picture from red to green. PLDT was up .21%

The five issues including SMPH (not part of marking the close but was instrumental in the afternoon delight) carried a market weight of 34.47% at the day’s close

Overall, the PSEi was down by .27% prior to the market intervention phase. When the runoff begun, losses had all totally been expunged. The PSEi was back on the green.

Yet the  broader market was on a clearly  correction mode with decliners leading advancers 108 to 87 or a margin of 21.

These orchestrated pumps have really been remarkable. For most people, this may seem irrelevant. The PSE and the SEC even ignores the rampantly used phenomenon even when marking the close is a legally prohibited activity based on SEC’s Securities Regulation Code and in the AMLA.

As one who values the sanctity of the marketplace, gaming of the market signifies a disturbing sign of how people will resort unscrupulous demeanor to sustain the status quo. Moreover, since all actions have consequences, marking the close represents a distortion of prices that has contributed to the imbalances or the grotesque mispricing of Philippine stocks.

Like in the movie the must watch movie The Big Short, unethical behavior ignored today may become a historical learning milestone tomorrow

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