PSEi slides to 7,600 level
AP file Photo/Aaron Favila
THE LOCAL stock barometer tumbled to the 7,600 level on Wednesday, underperforming regional markets, as a mix of valuation, US interest rate and political jitters escalated selldown by foreign funds.
The main-share Philippine Stock Exchange index lost 100.08 points or 1.3 percent to close at 7,619.10, slipping for the third straight session.
“It could be partly political,” said Joseph Roxas, president of local stock brokerage Eagle Equities. While reaction to last Friday’s bombing in Davao was muted, he said investors may now be more worried about the consequences of Pres. Rodrigo Duterte’s comments about US president Barack Obama.
Duterte had said he did not want to hear any lecture from Obama on extra-judicial killings amid the war against drugs in the Philippines, historically a strong US ally in Asia.
The upcoming US Federal Reserve meeting this September also remains a concern even as many investors have scaled back expectations of a rate hike. “Then of course, third quarter is always bad (for the market),” Roxas said.
A strong support level lies at 7,500 level, Roxas said, but noted that the market was now rife for a rebound.
“Since the PSEi’s decline was regionally isolated, it’s possible that foreign selling today was driven by concerns over the offense taken by the US government over President Duterte’s use of rather strong words in explaining his position over the issue of extra judicial killings,” said Jose Mari Lacson, head of research at ATR Asset Management.
The PSEi was weighed down most by the property counter, which slid by 2.44 percent while the holding firms likewise fell by 1.48 percent. The industrial and services counters were also sluggish.
Value turnover for the day amounted to P10.26 billion. On Wednesday, foreign investors were net sellers to the tune of P2.68 billion.
Around a fourth of stocks bought by foreign funds from February to August is now estimated to have exited the country.
“We feel that with the threat of domestic terrorism, a 30 percent (selldown) estimate is conservative and the present selling could very well reach 40 percent. If the selling stops at the 30-40 percent level, that is another P4.5 billion to P9 billion of foreign selling. At the current rate of selling, we feel the inflection point of this downtrend could be by the third or fourth week of September,” local stock brokerage Papa Securities said in a research note.
Papa Securities said would be the time to buy on the market’s weakness.
There were around twice as many decliners (125) as advancers (65) for the day.
Megaworld fell by 3.79 percent while SM Prime, MPI, Metrobank, ALI, JG Summit and Globe Telecom all declined by over 2 percent.
GT Capital, URC, BDO and SMIC all fell by over 1 percent while Ayala Corp. and AEV also slipped.
Outside the PSEi, among the notable decliners were RRHI, which slumped by 3.94 percent.
Among those that bucked the downturn were ICTSI, which rose by 5.13 percent. With bulk of its revenues generated overseas, ICTSI is seen insulated from domestic political risks.
First Gen gained 1.81 percent while PLDT and LTG both modestly firmed up.
