Philippine stocks recover on bargain-hunting, news of US Federal Reserve stimulus
By Doris C. DumlaoPhilippine Daily Inquirer
MANILA, Philippines—The local stock index climbed back to the 5,200 level on Thursday, aided by bargain-hunting and fresh expectations of another monetary stimulus by the US Federal Reserve.
The main-share Philippine Stock Exchange index clawed back 50.69 points or 0.98 percent to close at 5,202.84, ending a three-day slump. The day’s gains were led by the financial and mining/oil counters, which bounced by over 1 percent as buoyant regional trading emboldened investors to pick up oversold local stocks.
Value turnover, however, was still thin at P4.19 billion reflective of the so-called “Ghost month” period when many Asian investors would prefer to stay on the sidelines. There were 94 advancers that edged out 57 decliners while 40 stocks were unchanged.
Dealers said the market was set for a technical rebound on Thursday after a shakeout in the last three days. At the same time, a recovery in regional markets helped local investor sentiment.
A key support for the regional markets was an indication of “dovish” stance or monetary easing bias by the US Fed, which many in Wall Street has been expecting to undertake soon a third round of quantitative easing (QE3) – a bond buyback scheme to infuse additional liquidity. Regional gains were tempered, however, by a report indicating that China’s August factory output might have declined at the quickest pace in nine months.
At the local market, one catalyst was the upcoming adjustment in the composition of the PSEi, which would bring back Petron to the roster of blue chips and remove Cebu Air effective Sept. 10. Petron surged by 2.18 percent while Cebu Air fell by 4.7 percent.
Metrobank and Meralco, heavily sold down last week after getting index weight cuts in the MSCI main Philippine index, rebounded on Thursday. They respectively surged by 4.9 percent and 3.1 percent.
BDO (+0.67 percent), PLDT (+1.11 percent), Megaworld (+2.64 percent), ALI (+1.15 percent), AGI (+1.97 percent), AC (+1.46 percent), URC (+2.26 percent), ICTSI (+1.42 percent) and Philex (+1.84 percent) also contributed to the main index gains as investors bought these large-cap stocks at lower entry levels.
Among non-index stocks, other outperformers were Puregold (+4.81 percent) and Tanduay (+4.83 percent). Security Bank (+0.41 percent) likewise firmed up.
Apart from Cebu Air, ABSCBN-PDRs was another laggard for the day, declining by 4.55 percent.
In a daily research, Metrobank said investors should “remain vigilant as continued volatility in the interim brought about by the increasingly worrisome external risk remains to haunt investor confidence.”
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Tags: bargain hunting , Business , economic stimulus , Markets and Exchanges , Philippine Stock Exchange , Stock Activity , Stock Market , US economy , US Federal Reserve
