PSEi down 2.05% to 7,100 level

The local stock barometer slid to the 7,100 levels yesterday as fund managers scrambled to realign their portfolios in anticipation of the rebalancing of the main index.

The Philippine Stock Exchange index shed 149.18 points or 2.05 percent to close at 7,146.27. Leading conglomerate SM Investments Corp. (SM) fell by 9.24 percent while beverage-maker Emperador Inc. tumbled by 5.79 percent.

“The index was dragged down by a last minute selloff in SM. The market breached its short-term support of 7,150,” said Manuel Lisbona, president of PNB Securities.

“Assuming no change in SM’s fundamentals, we could see the index bounce back as bargain hunters buy up SM at these prices,” Lisbona added.

April Lee-Tan, head of research at COL Financial, said the sharp decline in SM prices was due to a last-minute transaction that forced a sharply lower close on Friday. “Also, weighting of SM in the PSEi will be reduced. Most likely, (this is a) result of fund managers rebalancing their portfolios,” she said.

Currently, SMIC has an index weight of 9.82 percent, the highest among the companies in the PSEi.

Meanwhile, Emperador will be stricken off the 30-company index on Monday. It will be replaced by Puregold Price Club.

All counters declined especially the holding firm counter which slipped by 2.82 percent due to SM’s decline. The financial, industrial and services counters all fell by over 1 percent.

Total value turnover for the day stood at P8 billion.

There were 102 decliners that overwhelmed 72 advancers while 47 stocks were unchanged.

Meanwhile, many other large-cap stocks fell ahead of the upcoming US payrolls data and next week’s US Federal Reserve meeting, which is seen leading to another increase in US interest rates.

LTG lost over 3 percent while BDO and PLDT declined by over 2 percent.

URC, Jollibee, BPI and Security Bank all fell by over 1 percent.

On the other hand, GT Capital gained over 1.82 percent while SM Prime inched up by 0.35 percent.

Outside of the PSEi, notable gainers included D&L (-0.48 percent) and Cemex (+1.53 percent) which firmed up in relatively heavy volume.