Bargain-hunting lifts stocks, but index stays below 5,000
The bludgeoned local stock market found some relief on Friday, but the bargain-hunting was not strong enough to keep the main index above the 5,000 mark.
The main-share Philippine Stock Exchange index (PSEi) recouped 155.34 points or 3.36 percent to close at 4,778.76, tracking the rebound across the United States and regional markets.
This may be the “calm after the storm” supported by the overnight rebound of US stocks, local stock brokerage Papa Securities said.
“While there are a ton of oversold names in the index at these levels, these might only be short-term trading opportunities as we still take a sell on strength stance and encourage to lighten on any potential rallies we might see—anticipating a further escalation of corona (COVID-19) cases here in the country,” the brokerage said.
For the week—which was disrupted by a two-day shutdown in relation to the Luzon-wide quarantine imposed by the government to combat the COVID-19 pandemic—the PSEi lost a total of 1,015.18 points or 17.5 percent, allowing the bears to cement their control of the market.
The biggest blow came on Thursday, during which the index crashed by 13.34 percent, wiping out P1.16 trillion worth of market capitalization in a single day.
On Friday, the rebound was led by the financial counter, which rose by 6.67 percent, while the holding firm index added 3.75 percent.
A fresh 50-basis-point interest rate cut by the Bangko Sentral ng Pilipinas (BSP) did not come as a surprise to the market, Papa Securities said.
Given the circumstances, the 50-basis-point rate cut appears to be the appropriate response from monetary authorities, said BPI lead economist Emilio Neri Jr.
“More importantly, this has to be complemented by a massive fiscal stimulus that will target key sectors and industries including health, travel, tourism but most specially the families that depend on daily wages. Most banks may need increased access to the BSP’s rediscounting facility, and, in turn, keep credit lines open for their clients,” Neri said.
The property counter also went up by 2.48 percent, while the services counter rose by 1.07 percent. The industrial and mining/oil counters slightly gained.
Value turnover for the day amounted to P6.66 billion. There was net foreign selling of P654.7 million.
There were 117 advancers that outnumbered 85 decliners, while 30 stocks were unchanged.
Investors picked up shares of property giant Ayala Land Inc. and BDO Unibank, which both surged by over 14 percent.
Jollibee and LTG both rebounded by over 9 percent while SM Investments, the day’s most actively traded company, rose by 8.17 percent.
ICTSI added 6.29 percent, while Ayala Corp. advanced by 4.06 percent.
First Gen and Metro Pacific both rose by over 3 percent.
On the other hand, PLDT lost 6.87 percent while Megaworld fell by 5.43 percent.
Globe Telecom and Meralco both lost nearly 5 percent, while SM Prime and JG Summit declined by 3.7 percent and 2.47 percent, respectively.
