PSEi slides below 4,900 in bloodbath

https://www2.pse.com.ph/ photo

MANILA, Philippines—It was another day of bloodbath at the local stock market on Wednesday as a global “risk off” trade caused by volatile Greek politics and a long-overdue market correction dragged the main index below the 4,900 mark.

Sliding for the sixth straight session, the main-share Philippine Stock Exchange index lost 113.22 percent, or 2.27 percent, to finish at 4,864.23.

“Markets remain hostage to Greece with global equities closing weak overnight. Fasten your seatbelts!” said Banco de Oro chief strategist Jonathan Ravelas.

“I am looking 4750-4850 support levels as good entry levels. A break below 4,700 (means we) need to reassess wave count. It would imply a much larger correction,” Ravelas warned.

Unable to form a coalition government after the recent parliamentary elections, global markets were jittery with news that Greece would have to appoint a caretaker government to lead the country to new elections.

In this downturn that has lasted for six sessions, the main index has given up 377.83 points, or 7.2 percent.

On Wednesday, all sub-indices dropped significantly but the worst hit were the industrial and mining/oil counters, which tumbled by over 3 percent.

The MSCI rebalancing, which would take effect at the close of May 31, likewise had some effect on the market, allowing SMIC, BDO and PXP to buck the downtrend.

Value turnover amounted to P8.1 billion. There were 43 advancers, which were overwhelmed by 127 decliners, while 31 stocks were unchanged.

Despite its inclusion in a closely watched MSCI index, DMCI fell by 2.96 percent as the positive news had long been discounted. URC, Megaworld, Metrobank, PLDT, MPI, AGI, EDC, BPI, AP, ALI, ICTSI, AC and Philex all fell sharply.

Security Bank and Bloomberry fell alongside the PSEi stocks.

MSCI announced on Wednesday a re-balancing of its equity indices that would take effect at the close of May 31. Apart from the DMCI, which was added to the MSCI Global Standard Indices, Philex Petroleum and Puregold,were likewise added to the MSCI Small Cap Index.

There were likewise some changes on index weights of some Philippine stocks that were already part of the MSCI indices. Manila Electric Co.’s weight was cut by 6.75 percent while Banco de Oro and SM Investments got a respective increase of 0.99 percent and 1.52 percent.

SMIC shares were up by 1.88 percent while BDO shares surged by 0.65 percent, one of the few stocks that bucked Wednesday’s stock market bloodbath. Affiliate SM Prime also benefited from this momentum (+0.65 percent).

Philex Petroleum advanced by 12.65 percent due to the positive surprise while Puregold declined by 1.37 percent.