THE LOCAL stock barometer firmed up above the 7,500 level on Monday, tracking the upswing in oil prices that perked up regional markets ahead of an upcoming US Federal Reserve meeting.
Overcoming a rough start, the Philippine Stock Exchange index added 22.08 points or 0.29 percent to close at 7,575.84 even as foreign investors continued to dump local equities.
“Much has been said about foreign selling since last month, though one quality separates this time’s outflows compared to before – magnitude. Foreign funds have sold an average of $23.1 million or P1.1 billion per day since August 12, 2016. For reference, the taper tantrum of 2013 brought an average of $7.3 million of selling per day. The past month has actually seen the fastest foreign fund outflow for the index since the start of our data in 2005,” Papa Securities said in a research note issued on Monday.
The local stock brokerage noted that the magnitude of the selling had also been disproportionate to the amount bought when measured year-to-date. In other words, it said that foreign fund outflows were not large simply because inflows this year had been large.
Papa Securities had expected foreign fund selling to be around 40 percent of the amount bought between February to August this year, a scale that had been reached as of Friday.
The stock market had been in the doldrums for the last six weeks. On Monday, foreign investors were still in a net selling position amounting to P885 million but domestic investors made up for the slack. Value turnover for the day amounted to P7.21 billion.
“On the other hand, considering that quarter-end window-dressing is just around the corner, we might see an inflection within this week,” Papa Securities said.
“We expect a rally until the end of the quarter; after that, the market will look towards outside markets such as the DJIA (Dow Jones Industrial Index) for direction.”
The day’s gain at the local market was led by the industrial, holding firm, services and property counters while the financial and mining/oil sub-indices remained sluggish.
Despite the PSEi’s gain, market breadth was negative as buyers mostly targeted large-cap stocks. There were 90 advancers which were outnumbered by 101 decliners while 47 stocks were unchanged.
The PSEi was led higher by ALI, MPIC and AEV which all gained over 1 percent. Ayala Corp., PLDT, GT Capital, URC, Security Bank, JG Summit and Globe also firmed up.
Outside the PSEi, notable gainers included Bloomberry (+5.51 percent), D&L Industries (+2.54 percent), MWC (+0.51 percent) and Vitarich (+38 percent) which all rose in heavy volume.
Vitarich recently obtained approval to graduate from court-assisted rehabilitation.
On the other hand, Metrobank and BPI both slumped by over 1 percent while SM Prime, SMIC and BDO all dipped. The selling on the three largest banks could be due to some investors’ reallocation of funds to Security Bank, which recently debuted on the PSEi.
Outside of the PSEi, there was also heavy selling on Puregold (-2.11 percent).
This week, AB Capital Securities said investors would be closely tracking key central bank decisions: those of the US Fed, the Bank of Japan and the Bangko Sentral ng Pilipinas./