Celebrating Another Record: May 8th’s Biggest “Rescue” Pump in the PSE’s History!

Celebrating Another Record: May 8th’s Biggest “Rescue” Pump in the PSE’s History!

People are awed by the spectacular. For this reason, in the stock market, record highs are glorified.

In the stock market, instead of the process, the ticker tape generates the attention of the audiences. Today, May 8th, a landmark feat in PSE’s history through the headline index, the PhiSYx, was attained.

The headline index closed the regular session and entered the market intervention phase down by 1.21%. But when trading resumed in the runoff phase, five minutes later, BOOM, the phiSYx was magically up by .2%! A phenomenal 1.41% RECORD pump transformed marvelously the index from deep red into green shoots!

Magical tricks also happen on the PSE!

The record mark-the-close pump was a culmination of the concerted pumping in the last hour of the day’s trading session.

Of course, it took an orchestrated move on several heavyweights to prop the index with such record intensity.

Four of the five firms with the largest market capitalization were among the most significant beneficiaries; which included, BDO and SM, of the Sy Group, where end session pumps produced 100% and 154% of their day’s gains of 1.79% and 2.94%, respectively.

JG Summit stole the thunder though. JGS entered the market intervention phase down by a whopping 3.28%, however, when the runoff bell rang, the firm’s price was suddenly up by an incredible 3.54% for a 6.82% pump!

BPI and URC were the other major beneficiaries from the index pump.

Even the buying sequence of brokers for these issues had been somewhat similar at the commencement of the runoff phase. Such entails the likelihood of access to the same brokers by one buyer or by a cabal of buyers operating on the rescue mission.

The advance-decline differentials which had been heavily skewed towards declines (133 to 46) reveal the general sentiment of the market as opposed to the index’s performance.

And the intensifying scale of pumps demonstrates the increasing desperation to sustain the general index on its current level. Do whatever it takes.

  

Most importantly, as a result of the blatant gaming of the PSE’s pricing system, equity securities have become immensely mispriced that which has been partially captured by the BSP led-Financial Stability Coordinating Council’s Financial Stability Report:

Stock market price-to-earnings ratios, on the other hand, have been persistently well past their textbook warning thresholds but there seems no evidence that investors believe the stock market to be overvalued. Whether this is a Minsky moment waiting to happen is certainly an important thought but the absence of clear-cut valuation measures for the market as a whole leaves the issue without an empirical resolution.

Sustained and brazen manipulations embed on the public’s mindsets such “no evidence that investors believe the stock market to be overvalued” belief.

And instead of allowing the market to discover, balance demand and supply and to clear maladjustments arising from economic interactions, sustained manipulations have led to the conveying of misinformation to the public prompting for a buildup of malinvestments (race-to-build supply).

At the end of the day, the buildup of economic imbalances resonates with and emerges from, the contortions in the stock market.

Thanks to the National Government and the PSE’s tolerance and the seeming implicit encouragement of market manipulation.

(charts courtesy of PSE, technistock and colfinance)

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