Exceptional performance
The market closed exceptionally well at 7,583.75 last week, which resulted in a strong weekly gain of 272.03 points or 3.72 percent.
Due to this performance, the market tucked in a favorable year-to-date gain of 743.11 points, equivalent to a general investment return of 10.18 percent for the 30-component benchmark stock index.
Several factors were behind the strong gains. Daily average transactions rose to P9.65 billion, which was about 37.46 percent higher than the market’s transaction average for the year.
Foreign investors also reversed their trading tack. They increased their daily trading transactions to as high as 59.79 percent of total market transactions to an average of 52.88 percent for the week. All week, they were net buyers.
All sectors were up for the first time. The property and financial sectors led with the highest gains of 5.90 percent and 4.30 percent, respectively.
The mining and oil sector actually had a smaller gain of 1.05 percent, but this was the first time in four weeks it showed strength, a favorable achievement in itself. Surprisingly, the sector is also up for the year, achieving a net gain of 2.03 percent.
With last week’s strong foothold, the average price-earnings ratio (PER) of the 30-component benchmark stock index rose high to 19.43x, while that of the All-Shares index remained at the relatively reasonable PER level of 17.73x.
Bottom line spin
It may still be early to put some significance to this exceptional performance, although it is something that has not been seen in a long while. You might be interested to know how some of the most actively traded stocks have performed.
At the price of P1,750 per share, PLDT Inc. (TEL) was already trading at 29.67x PER (TTM, trailing twelve months), way beyond the benchmark PER of 19.43x.
Globe Telecom, Inc. (GLOBE) had a lower PER of 17.95x on a dividend yield of 4.37 percent. But with TEL as the top market favorite along with its consistent dividend yield of 4.41 percent, the current play is understandable.
Trading beyond the market’s 30-component stock benchmark PER were Jollibee Foods, Inc. (JFC), SM Prime Holdings, Inc. (SMPH), SM Investment Corp. (SM), and Ayala, Inc. (ALI).
At the price of P198.20 per share and a dividend yield of 1.01 percent, JFC was trading at 40x. SMPH and SM were trading at 37.59x at P29.95 per share on a dividend yield of 0.77 percent and 28.99x at P780.00 per share on a dividend yield of 0.97 percent, respectively. ALI was trading at 25.71x at P35.95 per share on a dividend yield of 1.34 percent.
Within the PSEi and All-Shares PERs of 19.43x and 17.73x were the following: San Miguel Corp., Manual Life Financial Corp. (MFC), Sun Life Financial Inc. (SLF), Aboitiz Power Corp. (AP), Meralco Electric Co. (MER), and Ayala Corp. (AC).
Bank shares also appeared attractive at the following prices: Bank of the Philippine Islands (BPI) with 19.16x at the price of P107 per share on a dividend yield of 1.68 percent; BDO Unibank Inc. (BDO) with 17.64x at the price of P123 per share on a dividend yield of 0.98 percent; Metropolitan Bank & Trust Co. (MBT) with 15.60x at the price of P83.00 per share on a dividend yield of 1.18 percent; and Security Bank Corp. (SECB) with 17.61x at the price of P211 per share on a dividend yield of 3.22 percent.
Among those considered bargains due to their relatively acceptable dividend yield as of last week were: Del Monte Pacific Ltd. (DMPL), which successfully concluded last Friday its dollar-denominated follow-on offering that raised $200 million; GMA Holdings Inc (GMAP); and GMA Network Inc.
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