Manila, Philippines – The Philippine Stock Exchange Index slipped at the 7190 level before bouncing above the 7200 level at the close. The index closed at 7,222.08, which is lower by 54.74 points or 0.75 percent.
The broader all-share index is lower by 0.51 percent.
Sub-indices were mixed with the Financial and Service sectors closing high. On the other hand, Holdings, Industrials, Property, and Mining, and Oil sector closed low.
The worst performing sub-index is the Industrial sector, falling by 1.62 percent. The Holdings sector followed suit, falling by 1.39 percent.
Within the Industrial sector, URC led the sub-index lower as it closed at 139.50. This figure was lower by 1.38 percent versus last week’s close.
Moreover, JFC closed at 252.00 with a drop of 1.95 percent. MER closed at 331.80, falling by 2.41 percent. CNPF closed at 12.90 with a 9.15 percent decline.
Within the Holdings sector, SM led the sub-index lower as it closed at 880.0. This amount is lower by 2.65 percent versus last week’s close.
Furthermore, AC closed at 910.0, falling by 1.94 percent. GTCAP closed at 798.0, which is lower by 2.68 percent. AEV closed at 48.25, a 1.53 percent drop.
Gainers and Losers of the Day
The most active stocks today include SMPH with PHP 303.64 million in traded value. SM made it to the top gainers with a traded value of PHP 258.10 million. URC also had PHP 214.57 million in traded value.
Significant gainers for the day include CHP, which is higher by 13.45 percent. Joining the A-listers were WLCON by 9.71 percent, VUL by 8.59 percent, and OPM by 8.33.
On the other hand, the notable losers include ISM, with a 12.72 percent drop.
Joining ISM were CNPF by 9.15 percent, RCI by 7.84 percent, CEB by 5.00 percent, BLOOM by 4.79 percent, and LTG by 4.53 percent.
Market Breadth
There were 75 advances and 101 declines, while 53 names remain unchanged. Value turnover totaled PHP 3.97 billion. Foreign exchange rate stood at USD 1: PHP 54.02.
Index Still Expects to Get Above the 8,000 Level
BPI Securities Corp., the brokerage arm of the Bank of the Philippine Islands (BPI) projects the index to close at the 8,200 level by the end of the year.
This target, seen as fundamentals, seems to appear appealing already despite sustained high inflations and the weak peso.
Additionally, the market participants still have a positive outlook for earnings growth for the listed companies in the Philippines. It is despite quarter upon quarter losses for the year.
If these projections materialize, it will put the market to 4.2 percent lower than the closing index of 8558.42 in 2017.
As of writing, the index is at around 7190, almost 16 percent lower versus last year.
Meanwhile, foreign funds caused the general outflow last second quarter. Investors are cautious about their positions in the emerging markets.
During the third quarter, inflation is the main issue pressing the country, which reached 6.4 percent in August. To curb this, Bangko Sentral ng Pilipinas (BSP) already raised rates by 150 points cumulatively
The latest adjustment happened on Sept. 27, 2018, for 50 basis points.
However, the downside is that increased rates equate to higher lending rates. In this case, consumers would prefer to put their money into financial institutions
Businesses would be hesitant to borrow money for expansion. Raising the rates would reduce inflation but in turn, may slow down the country’s growth.
If the correction happened in the index, it would probably reach 7,000-7,100, which would peg the index at around 15x Price to Earnings ratio (P/E).
Market Consolidation
The market appears to continue its decline. The moving averages are bearishly aligned with the 15 EMA and 20 SMA as immediate resistance.
Moreover, MACD is bearish. RSI is also bearish and is nearing oversold levels. Estimated support is at 7191 while expected resistance is at 7413.
Foreign Fund Flow
PSEi registered a Net Foreign Selling worth P677,498,650.53 as of October 01, 2018. On a 30-day trading period, PSEi is on a Net Foreign Selling worth PHP13,119,634,990.41.
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