Like the property sector, the industrials have hardly been participants in the recent vertical price pumps on select issues that propelled the Phisix to its current 7,800-7,900 levels.
Current price dynamic represents an amalgam of the last two attempts (2015 and 2016) at 8,100.
Like 2015, only a few PSEi issues were responsible for the present buoyancy. Like 2016, aside from pumps on elite PSEi 30 issues, there had been selective participation in the broader market.
I constructed three filters to constitute as qualifiers for participant issues in the latest fastest perpendicular thrust on the PSEi 30 since 2007. (Yes current vertical price moves resonate with the August-October 2007)
-current prices for the week have to be higher than the December lows
-current prices for the week have to be at the highest level since the December lows.
-to avoid the consideration of momentary price spikes, which hardly accounts for a trend, an uptrend of at least two months
Here are charts of the 7 industrial composite issues of the PSEi 30…
Two main reasons for the exclusion of short-term price spikes: One it hardly constitutes a trend. Second, such steep price actions can swiftly be negated or reversed.
Food manufacturing titan URC’s shocking 11.35% crash (!) this week should serve as an example. The issue could have qualified as a participant in the SM group led PSEi pump, but this week’s crash virtually vanquished all the gains acquired since the end of March. It looks very much like Newton’s Law in action.
Opposite URC, SMC’s Petron (PCOR) rocketed by a staggering 10.89% last week! The surge brought the issue to its highest level since December. It also surged past December lows. But PCOR fails the third criteria: there has been no uptrend except for this week’s spike. And as URC has shown what goes up can come down…rapidly.
EDC could have also been a candidate, but it has failed to break free from its consolidation phase even as the PSEi surged past 7,800.
In all, ZERO, NADA, ZILCH, ZIPPO of the 7 PSEi industrial issues have demonstrated the same degree of frenetic pumping similar to the activities of its peers from the top 5. So unless there will be dramatic and drastic changes soon to reverse this, current dynamics suggest that these issues will WEIGH on any pumping motion directed at the top 10 issues.
To move on to the other 23 of the 29 members of the industrial sector index….
Of the 6 issues, only Alson’s Consolidated (ACR) and EEI’s steep climb has resonated with that of the PSEi’s heavyweights.
Of the next six issues, only Integrated Microelectronics (IMI) has partaken in the vertical rally. Note that cement manufacturer HLCM plunged due to the disappointing top and bottom line in the 1Q. Think of what this means to the much-ballyhooed infrastructure and construction boom!
The third set shows of a much better probability. Three issues Megawide (MWIDE), Purefoods (PF) and Phoenix (PNX) have, so far, been beneficiaries of the recent meltup.
And of the last four, the speculative wave has only percolated to Pryce Corporation (PPC)
Additional notes:
Among the significant industrial non-benchmark liquid issues, CIC and ANI have stirred hot whereas CHP and PIZZA have remained cold.
And yes even more intriguing has been the developing divergence in price trends between construction managers EEI and MWIDE vis-à-vis cement manufacturers HLCM and CHP. I will make a short note on the dismal 1Q performance of the cement industry next.
So, only SEVEN issues (ACR, EEI, IMI, MWIDE, PNX, PF and PPC) of the 29 composite members of the industrial sector or 24% have taken part in the recent bidding binge.
Or, such reveals of the very narrow breadth of participation of listed issues under the rubric of the industrial umbrella.
Index manipulators would have to double their time and efforts to pump and heave up the broader markets so as to fulfill their mission of breaking 8,100.
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