Red October in Philippine stocks, bleed to 6,800
MANILA, Philippines – Philippine shares were in the red, feeling the onslaught of regional markets being sold down on higher volumes.
The Philippine Stock Exchange index (PSEi) closed at 6,884.38 on Thursday, October 11, 1.67% down from Wednesday. The index touched a 52-week low of 6,790.58.
The local bourse is down by 21.09% year-to-date and has been suffering net foreign outflows for 31 straight days.
All shares (-1.34%), financials (-1.06%), industrial (-0.17%), holding firms (-2.27%), services (-1.94%), mining and oil (-0.83%), and property (-2.12%) were all down as well.
The most active stocks for the day were BDO Unibank (-1%), Ayala Land (-2.53%), SM Investments Corporation (-3.24%), Ayala Corporation (-2%), and SM Prime Holdings (-0.88%).Top gainers were Da Vinci Capital Holdings (12.5%), Euro-Med Laboratories (6.25%), United Paragon Mining (6.25%), Imperial Resources (5.88%), and Golden Bria Holdings (5.66%).
Top losers for the day were mostly companies related to the bid for the country’s 3rd major telecommunications player.
Easycall Communications (-23.64%), NOW Corporation (-15.34%), Starmalls (-13.68%), Manila Jockey Club (-13.04%), Oriental Peninsula Resources (-10.68%), and Transpacific Broadband Group (-10.38) incurred massive sell offs. (READ: DICT accuses NOW Telecom of delaying 3rd telco entry)
EastWest Senior Vice President and Trust Officer Rob Ramos explained that the local bourse followed the drop in US equity prices.
“The International Monetary Fund (IMF) slashing world growth rates also raised some concerns,” Ramos said.
IMF cut its outlook for global Gross Domestic Product (GDP) by two-tenths to 3.7% for 2018 and 2019 amid a worsening outlook for developing economies.
Meanwhile, Luis Limlingan, Managing Director of Regina Capital said that the Philippines was affected by US stocks tumbling amid "fresh concern about the impact of the trade war with China."
European equities also dipped, "joining a global equity selloff, with investors unable to shake concerns about growth prospects."
Limlingan sees the support level at this point to be at 6,800.
With relatively cheaper stocks overall, is it now time to buy?
Limlingan said that it is, but hoped that inflation will not peak by the end of the year.
Ramos also said that there are buying opportunities with “some more volatility.” He also expected more stability after the 3rd quarter earnings of companies come out.
Limlingan projected the PSEi to end 2018 at 6,600 to 6,800 if inflation touches 7%. Should prices fall lower than previous months, then the forecast is at 7,200 to 7,400. – Rappler.com