PSEi on 7th day of losing streak
AP file Photo/Aaron Favila
THE LOCAL stock barometer slipped for the seventh session in a row on Thursday as lofty valuations, oil price slump and prospects of rising US interest rates gnawed on investor sentiment.
The main-share Philippine Stock Exchange index lost 14.06 points or 0.18 percent to close at 7,773.31. The index pulled back by over 100 points in intra-day trade but pared down losses at close as domestic investors picked up shares dumped by exiting foreign funds.
“This market reversal we are seeing is technical. I don’t think it is accurate to say that the outflows are driven by a cautious view by foreign investors towards (Pres.) Duterte. Keep in mind the rally we saw this year was not because of Duterte. It was largely driven by carry trade – that is, funds abroad came rushing to the Philippines as they were looking for yields given the negative interest rates in many OECD (advanced) economies,” said BPI Securities chief executive Michaelangelo Oyson.
“By the same token, this flow reversal is not about Duterte. It is about market concerns that the (US Federal Reserve) Fed may raise rates soon which will diminish the yield attractiveness of the Philippines as interest rate differential compresses,” Oyson said.
The pullback, Oyson said, would a buying opportunity, noting that the underlying macroeconomic outlook of the Philippines remained positive while global interest rates would remain low because of global deleveraging (asset reduction) and generally accommodative monetary policies that will be supportive of equity markets.
Luis Gerardo Limlingan, managing director at Regina Capital, said markets were mostly lower on September’s first trading day as sentiment was weighed by sharp overnight declines in oil prices and as traders shrugged off a better-than-expected reading on China’s manufacturing sector.
“The same sentiment may continue (Friday) as investors will be looking ahead to Friday’s key U.S. non-farm payroll report,” he said.
Marvin Fausto, COL Fund expert and president of IFE Management Advisers Inc., said that over the short-term, political jitters could weigh down the market. “I think political jitters will be present with any new administration. As for the market, I believe valuations will remain elevated. Volatility will just persist. The current weakness just shows the initial market anticipation has now been discounted,” he said.
First Grade Finance managing executive Astro del Castillo isn’t worried about the pullback. “No doubt that the romance (with Duterte) will continue specially as soon winds of change has been felt. Let the foreign funds cash in and let the local investors take advantage of the dip. We’ve been waiting for this correction,” he said.
Only the financial index stayed afloat on Thursday as investors picked up shares of Metrobank (+4.67 percent), BPI (+0.47 percent) and Security Bank (+2.16 percent). Security Bank is set to join the PSEi by Sept.12.
There were 121 decliners that trumped 82 advancers at the market. Value turnover amounted to P9.75 billion. There was around P2 billion in net foreign selling for the day.
By counter, the property sub-index was the most battered with its 1.65 percent decline.
SM Prime fell by 4.36 percent and was the most actively traded stock for the day. Investors also sold down shares of PLDT and URC which both dropped by over 1 percent while ALI, AC, SMIC, ICTSI and BDO also slipped.
Notable declines outside the index included Vitarich (-17.57 percent), Cemex (-1.48 percent) and Cirtek (-1.6 percent).
Meanwhile, other PSEi stocks that bucked the day’s downturn were MPI and Megaworld, which both gained over 2 percent. Globe went up by 1.37 percent.
Medco Holdings was actively traded on Thursday, rising by 49.38 percent.
