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.

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