Market slips but index still deemed ‘extremely attractive’

The local stock barometer dipped on Monday, in line with mostly sluggish regional markets, ahead of President Duterte’s State of the Nation Address (Sona).

The main-share Philippine Stock Exchange index (PSEi) lost 23.34 points, or 0.28 percent, to close at 8,246.83.

Elsewhere in the region, investors tempered their expectations of an aggressive Federal Reserve interest rate cut, while tension in the Persian Gulf escalated after Iran seized British tanker Stena Impero last Friday in the Strait of Hormuz.

On the US Fed, Papa Securities said expectations for a 25-basis point cut increased to 84 percent from the previous 75 percent, while expectation for the 50-bp cut decreased to 16 percent from the previous 25 percent.

Papa Securities had expected Monday’s trading to be quiet—still unable to breach the 8,500 resistance level—as all eyes and ears were focused on Mr. Duterte’s Sona.

Christopher Mangun, head of research at AAA Securities, noted that the main index had slid by 1.5 percent upon opening but recovered most of its losses at close.

“From a technical standpoint, the PSEi looks extremely attractive and with the recovery that we saw today after a massive sell-off in early trading, investors are starting to take this rally seriously. Trading in blue chips continues to pick up and this may be the trend in the market for the next few weeks,” Mangun said.

The PSEi was weighed down by the financial, industrial, services, mining/oil and property counters.

Only the holding firm counter gained, albeit at a slight pace.

There were 103 decliners that edged out 80 advancers, while 61 stocks were unchanged.

The PSEi was dragged down most by SM Prime and ICTSI, which both fell by over 2 percent.

Jollibee, BPI, Megaworld and GT Capital all slipped by over 1 percent.

SM Investments, Ayala Land, Metrobank and PLDT all declined.

Outside of the PSEi basket, one notable decliner was Nickel Asia, which lost 4.81 percent.

On the other hand, the PSEi’s decline was tempered by the 2.11-percent gain eked out by Ayala Corp.

RLC, URC, RRHI and DMCI Holdings all gained over 1 percent.

Meanwhile, Philippine National Bank (PNB) listed on Monday P12 billion worth of new shares sold from its recent stock rights offering (SRO).

“I understand that the company will be using funds raised from this SRO to further boost its core capital, spur loan growth, and finance development of digital initiatives and products and services. All these undertakings will help improve the company’s operations. These will also benefit PNB’s clients, which avail of the bank’s wide range of products and services through its more than 700 branches domestically and the over 70 branches, representative offices, remittance centers and subsidiaries in 16 countries,” PSE chair Jose Pardo said during the listing ceremony.