Stock Market

Stocks search for leads

Posted on July 05, 2013

STOCKS moved sideways yesterday to end in the red due to profit taking on select blue-chip issues while investors wait for market-moving news.

The Philippine Stock Exchange index (PSEi) fell 15.86 points or 0.24% to close at 6,464.26, while the broader all-share index gained 2.02 points or 0.05% to settle at 3,955.32.

“The market traded sideways today to pave the way for a consolidation,” Manny P. Cruz, market strategist at Asiasec Equities, Inc., said in a telephone interview.

While certain blue chips dragged down the PSEi like SM Investments Corp. (SMIC), Ayala Corp. and Ayala Land, Inc., the all-share index gained due to the mining and oil sector.

Mr. Cruz said the surge could have been fueled by speculation among investors that President Benigno S. C. Aquino III will be “pushing for better solutions for the revenue-sharing scheme between the government and the industry.”

The issuance of mining permits has been temporarily halted as the government crafts new tax rules for the industry, keen on collecting more revenues.

Thirteen business groups have written to Mr. Aquino to petition, among others, for the creation of an internationally competitive tax regime for mining.

Four out of six sectoral indices gained yesterday, led by mining and oil, which surged by 884.22 points or 6.44% to 14,614.98. It was followed by services, which added 8.02 points or 0.42% to 1,933.35; financials, which jumped 5.08 points or 0.31% to 1,641.95; and property, which rose 4.02 points or 0.16% to 2,532.33.

Meanwhile, the industrial sector dropped 57.22 points or 0.59% to 9,672.91, while holding firms dipped 28.79 points or 0.49% to 5,885.18.

Investors are also waiting for market drivers.

“Foreign investors remain on the sidelines as they wait for clearer leads,” said Lexter L. Azurin, research head at Unicapital Securities, Inc.
The United States will release its non-farm payrolls on Friday, a key indicator of employment. Yesterday, it already reported an increase in jobs in the private sector and a dip in jobless claims.

On the local front, investors are waiting for the second-quarter performance of companies, which will be released by the end of July, Mr. Azurin said.

Elsewhere, Wall Street was up. The Dow Jones industrial average index gained 56.14 points or 0.38% to 14,988.55; the S&P 500 index added 1.33 points or 0.08% to 1,615.41; while the Nasdaq composite index increased 10.27 points or 0.30% to 3,443.67.

Locally, trading was thin as value turnover stood at ₱5.43 billion yesterday, down from ₱7.04 billion on Wednesday, both lower than the ₱10-billion daily average.

Gainers outnumbered losers, 99-57, while 36 issues were unchanged.
A daily list of the 20 most actively traded stocks showed 10 gained while 10 others lost.

Leading the gainers were SM Prime Holdings, Inc., which grew by 30 centavos or 1.82% to ₱16.80 apiece; Alliance Global Group, Inc., which jumped 45 centavos or 1.86% to ₱24.60; and Philippine Long Distance Telephone Co., which climbed ₱38 or 1.33% to ₱2,892.

Leading the losers where SMIC, which shed ₱19 or 2.11% to ₱881 per share; Ayala Land, Inc., which dipped 40 centavos or 1.31% to ₱30.10; and Metro Pacific Investments Corp., which fell 10 centavos or 1.89% to ₱5.20. Sideways trading will continue today, analysts said.

“Trading will remain sideways [today],” Mr. Cruz said. “We don’t expect any leads from Wall Street because of the [Fourth of July] holiday.”

Mr. Azurin agreed: “We expect low-volume trading in the absence of economic activity in the US.” -- Cliff Harvey C. Venzon