PSEi back to 7,200 as SM rebounds

The local stock barometer climbed back to the 7,200 level on Monday as leading conglomerate SM Investments recouped most losses from Friday’s sell-off.

The main-share Philippine Stock Exchange index (PSEi) gained 86.82 points or 1.21 percent to close at 7,233.09 on the first day of the PSEi’s rebalancing.

All counters went up, led by holding firms, which firmed up by 1.9 percent due to SM’s rebound.

SM bounced by 7.76 percent to close at P645.50. To recall, SM slid by 9.24 percent last Friday as fund managers scrambled to realign their portfolios ahead of today’s main index rebalancing.

Effective today (Monday, March 13), SM’s weight (in PSEi) was reduced by 0.51 percent along with the removal of Emperador to accommodate the inclusion of Puregold with a 1-percent weight in the index. Ron Acoba, chief investment strategist at equities research provider Trading Edge, explained that the sharp drop seen on Friday was because index funds that track the PSEi appeared to be worth more than P100 billion which sold 0.5 percent of their SM shares at Friday’s closing.

When asked whether SM had bought back shares from the open market on Monday, SM investor relations chief Cora Guidote said the rebound by driven by bargain-hunting. “A lot of investors had been waiting for a buying window. Since the drop in shares last week was purely technical, investors took advantage,” Guidote said.

Apart from SM’s rebound, the upswing in the local market also reflected mostly firmer regional markets.

“After much market drama, another rate increase from the FOMC (Federal Open Market Committee) now looks like a forgone conclusion when the committee members meet later this week. This information is already being discounted into the market,” said Luis Gerardo Limlingan, managing director at Regina Capital Development.

In addition, Limlingan noted that US non-farm payrolls had increased by 235,000 in February with a 9,000 upward revision to the prior two months, moderately above consensus expectations. Meanwhile, he noted that US jobless ratio had edged down to 4.7 percent, one tenth below Fed officials’ estimate.

At the local market on Monday, the mining/oil counter was likewise up by 1.04 percent.

Value turnover for the day amounted to P6.46 billion. Domestic investors made up for the slack in foreign risk-taking. There was net foreign selling of P280 million for the day.

Market breadth was neutral. Advancers equalled decliners in numbers (94).

Apart from SM, the PSEi was led higher by Semirara which rose by 2.44 percent while AGI, BDO, URC, Metrobank, ALI and Globe Telecom all advanced by over 1 percent.

Security Bank, SM Prime, MPI and JG Summit also contribute to the PSEi’s gains.

Outside of the PSEi, notable gainers included Century Pacific, which gained 3.95 percent, while affiliate company Shakey’s Pizza Asia gained 3 percent.

Century Pacific is set to debut on the highly-tracked FTSE Global Equity Index Series for Asia Pacific excluding Japan, joining the small cap and all-cap indices effective March 20. MPIC on the other hand, is moving up to the FTSE’s large cap index, replacing AGI.

On the other hand, GT Capital fell by 3.17 percent while PLDT and AEV both slipped.