Market decline dashes hopes for Santa Claus rally

The local stock barometer slid to the 6,500 mark Thursday on sluggish global risk appetite, dashing hopes of any relief from Santa Claus.

The main-share Philippine Stock Exchange index lost 99.19 points or 1.48 percent to close at 6,587.17 as foreign investors continued to dump local equities.

“The lackluster trading overseas and absence of market-moving news in the local front triggered the sell off today. The long weekend discouraged further buying,” said Astro del Castillo, managing director at fund management firm First Grade Finance.

“Most investors have surrendered themselves to the fact that Santa Claus will not be appearing this year given the many red flags for 2017. Expect the same trend for the remaining trading days for this year,” he added.

However, Del Castillo said it was still good to accumulate slowly for long-term investment positions.

All counters ended in the red, led by the industrial sub-index which fell by 2 percent. The financial, holding firm, property and mining/oil counters all dipped by over 1 percent.

Value turnover for the day amounted to P6.6 billion. Net foreign selling amounted to P1.13 billion.

There were 123 decliners overwhelming 43 advancers while 46 stocks were unchanged.

Investors dumped shares of large-cap stocks such as JG Summit, which fell by over 4 percent, and Aboitiz Equity, which dropped by over 3 percent.

Metro Pacific Investments, Ayala Land, Jollibee, Metrobank and DMCI Holdings declined by over 2 percent while SM Investments, Megaworld and Semirara all slipped by over 1 percent.

Security Bank, Globe and BPI also contributed to the decline.

Outside of the PSEi, newly listed Shakey’s PIZZA fell by 3.93 percent to close at P11.24 per share, lower than its stock debut price of P11.26 per share.

Among the few large-cap stocks that defied the day’s trend were SM Prime and Ayala Corp., which both posted modest gains.

The PSEi has now fallen by 364.91 points or 5.24 percent from its end-2015 level. The index closed 2015 at 6,952.08, down by 3.85 percent. If the PSEi ends lower at yearend, this will mark the second straight year of
decline.

Citigroup said that over the past five weeks there have been continuous outflows from global emerging market (EM) funds, but noted continuous inflows into EMEA (emerging markets in Europe, Middle East and Africa) funds.

“Russia is now the second largest overweight EM market among EM funds, with only India above it,” Citi said in its latest funds flow report.

EMEA countries include the Czech Republic, Egypt, Greece, Hungary, Poland, Qatar, Russia, South Africa, Turkey and United Arab Emirates.