Active, but lacks the vigor
UNLIKE the previous national election years, the market does not seem to have today the kind of vigor that should have been sending it to some frenetic trading activity by now.
For instance, the benchmark Philippine Stock Exchange index (PSEi) managed to end higher last week at 7,247.20, but total value turnover wasn’t impressive. Average daily value turnover for the week was too low at P5.7 billion while average daily volume for the week was quite high at 5.7 billion shares.
Previously, when the market allowed exciting stock plays, average daily value turnover was at least P7 billion and average daily volume was only about 3.5 billion shares.
One significant factor that seemed to be holding down the market was expressed long time ago by Fitch Group’s think tank, Business Monitor International (BMI).
Note that foreign investors’ percentage of participation to total market transactions rose to as high as 58.85 percent last week. Data revealed, however, it was the result of net selling transactions, which clearly indicated that foreign investors were, indeed, getting out of the market.
BMI had expressed fears that this year’s national elections could bring in a new leadership that can pull back the political reforms and economic gains made by the current government. BMI credited the Aquino administration for making significant successes in strengthening the country.
The campaign against corruption under the present administration improved the country’s business environment, BMI said. It has allowed the Philippines to enjoy strong growth and manageable inflation and fiscal improvement, leading to upgrades from all major credit rating agencies, BMI added.
In 2014, the Philippines was cited as one of the biggest gainers in the Transparency International’s Corruption Perceptions Index. The country climbed to 85th place in 2014 from 134th when the current administration came in in 2010. This was clear evidence of the real gains made by the current administration, BMI said.
The possible entry of a new leadership, based on recent presidential surveys, seemed to have agitated the markets.
Based on the Pulse Asia survey released last April 1, Senator Grace Poe regained her number one spot with a voter preference rating of 28 percent.
Statistically tied at second place were Davao City Mayor Rodrigo Duterte, who got 24 percent, and erstwhile scoreboard leader Vice President Jejomar Binay, with 23 percent.
Administration bet Mar Roxas got 19 percent while Senator Miriam Santiago got 2 percent.
The presidential contest, it seemed, has become a three-way race.
Bottom line spin
Poe’s continued lead is making some quarters worried, specifically on the retinue of traditional politicians behind her. Some, however, console themselves that her margin of lead is precariously slim that could easily evaporate in the last stretch of the campaign period.
Poe’s inexperience in government, let alone her untested grasp on foreign policy and the peace process, haunts her ability and competence to occupy the highest position in the land. Her popularity may, as well, disintegrate when party politics start to work during the elections.
Party politics was a big factor in the case of Binay in the past. But the bulk of his original rainbow coalition is said to be on the decline. Crossovers to other party lines have decimated the once great coalition.
And though he advanced in the last survey, the gain was not substantial. His slide in appeal started when he and his family were accused of corruption and other related issues by certain close associates more than a year ago.
Binay’s propaganda as a catalyst of progress and development in Makati had even slowly undermined his claimed track record. It conveniently overlooked the contributions made by private initiatives like what the Ayalas did in making Makati a business hub and financial center.
Yet, Binay, is still not out of the race.
Meanwhile, Duterte, like US presidential hopeful Donald Trump, has been largely relying on his sheer reputation and popularity. But at this point of the campaign period, the strategy seems to be losing steam and attractiveness.
His blunt persona is making people more edgy lately. Some fear that his priorities could become a hindrance to the political reforms and economic gains already made.
Roxas is the logical alternative to the perceived threats to the country’s gains. But he is like the current market we are in today—active, but lacks the vigor.
In the end, though, it looks like the votes of the remaining four percent “still undecided” voters and those forced to yield to the pressure of party politics can still become deciding factors on who will ultimately become President of the Philippines.
(The writer is a licensed stockbroker of Eagle Equities, Inc. You may reach the Market Rider at [email protected], [email protected] or at www.kapitaltek.com.)
