Stock Market

Egypt revolt triggers selling; PSEi plummets

Posted on February 01, 2011

STOCKS CONTINUED to plummet, their fall made worse by the upheaval in Egypt, analysts said.

The Philippine Stock Exchange index (PSEi) plummeted by 2.24% or 88.87 points to close at 3,881.47, while the broader all shares index sank by 2% or 61.75 points to end at 3,033.13.

“The political unrest in Egypt resulted in selling by foreign and local investors,” said Paul D. Balaoing, analyst at PCCI Securities, Inc., in an interview yesterday.

“Investors found more reasons to sell after US markets plunged last Friday amid continued civil unrest in Egypt,” said Prince Anthony A. Yeung, analyst at AB Capital Securities, Inc., in a separate market report.

The protests to force Egyptian President Hosni Mubarak to step down from office after 30 years of authoritarian rule have claimed over a hundred lives so far.

News that the economy expanded by 7.1% in the fourth quarter and by 7.3% in 2010, the fastest in the post-Marcos era, was largely ignored.

“Lost in [yesterday’s] selling was news the local economy grew by 7.1% during the fourth quarter of 2010. This piece of good news was largely ignored as investors have been on selling mode for most of 2011,” Mr. Yeung noted.

For Mr. Balaoing, the GDP figures were “expected already so investors looked at the global scale.”

Foreign investors dumped stocks yesterday, with net foreign selling at P1.13 billion.

Trading volume and value fell, with 7.22 billion shares worth P5.11 billion changing hands, from 7.35 billion shares worth P5.46 billion on Friday.

Decliners greatly outpaced advancers, 106 to 33, while 35 stocks did not change.

All subindices were in the red, led by financial companies that declined by 3.06% or 27.53 points to 870.86.

Industrial firms dropped 3.02% or 210.78 points to 6,764.31 while holding firms shed 2.28% or 73.11 points to 3,126.45.

Property companies lost 2.26% or 33.79 points to 1,464.21 while mining and oil slipped by 0.82% or 114.90 points to 13,826.70.

The service sector fell by 0.63% or 9.75 points to 1,536.06.

Almost all active shares were in the red.

The decliners were led by top-traded and index heavyweight Philippine Long Distance Telephone Co. that lost 0.72% or P18 to P2,460.

Aboitiz Power Corp. slumped by 5.29% or P1.55 to P27.75 while Metropolitan Bank & Trust Co. sank by 2.55% or P1.70 to P64.90.

Only three stocks bucked the trend and ended in the green, led by Manila Mining Corp. that climbed by 3.57% or P0.001 to P0.029.

Lopez Holdings Corp. inched up by 0.61% or three centavos to P4.88.

Consunji-led Semirara Mining Corp. gained 0.15% or 30 centavos to P198.90.

For the entire week, the market will still look for leads abroad but bargain hunters might take advantage of cheap stocks, analysts said.

“Most likely, there will be a reversal [today] because the market is recovering from last week,” Mr. Balaoing said.

“External developments will continue to dictate the performance of the market...,” Mr. Yeung said.

“The announcement that GDP grew by 7.1% in the fourth quarter of 2010 is positive, but investors are more interested in this year’s growth,” Mr. Yeung added.

He said the market is looking forward to 2010 full-year corporate earnings reports.

Mr. Balaoing pegged the support level at 3,800 and the resistance level at 3,900 to 3,950 for this week.

“The PSEi still has room to move lower but should find support at 3,850,” Mr. Yeung said. -- Neil Jerome C. Morales