Friday, September 15, 2017

How Record 8,180.85 was a Product of Transmutation; Fumbling Foreign Investments and Online Jobs!

In praise of another record high, the PSE published

The Philippine Stock Exchange index (PSEi) closed the week at another record high. 

The PSEi ended Friday's trading session at 8,180.85, up by 35.94 points or 0.44 percent from Thursday's record close of 8,144.91.   

The All Shares index also closed higher at 4,836.33, up by 20.42 points or 0.42 percent. Five of the six sectoral indices closed in the green with the property sector posting the biggest gain of 1.3 percent.

Value turnover for the day amounted to Php 11.18 billion with 1.18 billion shares traded.

"Market sentiment continues to be positive buoyed by the favorable outlook of analysts on the overall market. This optimism was again validated with the market closing today at yet another record high and with trading value exceeding P11 billion.  We remain hopeful that our market levels and trading volumes continue to be robust," said PSE President and CEO Ramon S. Monzon.

Year to date, the PSEi has gained 19.6 percent.

Here is what the PSE didn’t say…

The Phisix was down by .42% prior to the market intervention phase. All of a sudden…BOOM…the PSEi ended the session magically up by .44%!

Marking the close transactions pumped a staggering .86%!!!

Such brazen maneuvers were manifested in all the mainstream sectoral indices

On an individual stocks basis, below are the biggest end-session pumps:

With the exception of ALI, all issues indicated were in the RED prior to the close. Then magic occurred!

For instance, SM was down by .62% when the huge pump sent the issue to close significantly higher by 1.21%!

ICT’s case was even more striking. ICTSI was down by 1.07% when magic transformed red into a humongous +2.45%!

Also 52% of Ayala Land’s gains for the day was due to the end session pump!

What can’t be done in the regular session had to be fixed at the close!

In contrast to the PSE, evidence revealed that the latest record high has barely been about “a positive” or “favorable outlook”, but about price fixing or price manipulations!

And as fixers fervently try to get free lunches going, more negative news has been surfacing in the real economy.

Interestingly, the Philippine Statistics Authority reported second quarter and first semester FDI

Total foreign investments (FI) approved in the second quarter of 2017 amounted to PhP 18.2 billion from PhP 40.4 billion recorded in the same period last year. The total FI represents the seven  investment promotion agencies (IPAs), namely the Board of Investments (BOI), Clark Development Corporation (CDC), Philippine Economic Zone Authority (PEZA), and Subic Bay Metropolitan Authority (SBMA) as well as the Authority of the Freeport Area of Bataan (AFAB), BOI-Autonomous Region of Muslim Mindanao (BOI-ARMM), and Cagayan Economic Zone Authority (CEZA),. Meanwhile, total approved FI for the first six months of the year reached PhP 41.0 billion, lower by 38.4 percent from PhP 66.6 billion in the previous year.

Since comparative data used in most disclosures have almost always been from a single year only, specifically the previous year), I had to revert to the old publications to obtain a broader history of FDIs

And since its apogee in 2013, Foreign Direct Investments have trended lower!

Present levels have even sunk to 2012 lows after a marginal bounce in 2016!

Even more, BSP registered FDIs have mostly been about “expansion in debt instruments (or intercompany borrowings from foreign direct investors by their subsidiaries/affiliates in the Philippines)”. Instead of equity infusions, FDIs have mostly been about debt, debt, and debt! Awesome!

Moreover, the downturn in foreign investments appears to have been reinforced by online job advertisements.

Online job advertisements continue to lose momentum (jobstreet and bestjobs).

There have been so much jobs from the present administration’s touted economic programs such that one online job advertising site, JobsOpening.ph will shut down at the end of the month!

Thus, record stocks have been meant to cover structural entropy!

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