Local stock market bucks global timidity

AFP File PHOTO / JAY DIRECTO

MANILA, Philippines—The local stock market fared well on Friday even as global investor sentiment turned more cautious given lingering US economic woes and the US crackdown against investment banking giant Goldman Sachs.

The main-share Philippine Stock Exchange index gained 26.32 points or 0.6 percent to 4,392.91 as investors picked up selected blue chips. Profit-taking on Lepanto and PLDT capped the gains of the PSEi, which had been buoyant for the last three sessions.
By sector, the financial index led the index higher, rising by 1 percent. On the other hand, the property and mining/oil counters succumbed to profit-taking.

Turnover, however, thinned to P4.48 billion from the previous day’s P6 billion. Despite overall index gains, there were only 64 advancers against 82 decliners while 45 stocks were unchanged.

“Having started the month on a slightly positive note, equities will continue to attract funds away from fixed-income instruments as global risks are perceived to have waned. Furthermore, the recent drop in prices have not only created blue chip and second-line bargains but has narrowed the spread between alternative returns on equities on one hand and competing assets on the other,” said Justino Calaycay Jr., dealer at local stocks brokerage Accord Capital Equities Corp.

The index was led higher by Metrobank, Security Bank, Banco de Oro alongside Megaworld, ICTSI, Ayala Land, SM Prime, Aboitiz Power, SM Investments, BPI, AGI and AEV. RCBC also edged higher on heavy trade.

Meanwhile, aside from telecom giant PLDT and mining stock Lepanto A (open only to local investors) and B (open to both local and foreign investors), EDC capped the PSEi’s gains. There was likewise profit-taking on San Miguel Corp., Boulevard Holdings and Manila Mining.

Calaycay said local stocks remained relatively undervalued particularly when viewed in the context of a surge in global recovery.

“In the same breath, we continue to hold that risks remain elevated, though not as much as it did a couple of months back. Retreats impacted by external shocks should open buying windows for local companies whose numbers through the first semester have proved resilient, providing clues of their full-year prospects with just a month and a quarter in the balance,” Calaycay said.

“As we move deeper into the month, we can expect funds to shift from speculative plays to more fundamentally-based positioning ahead of end-third quarter window-dressing,” he said.