Stock Market

JP Morgan upgrade feeds buying

Posted on February 21, 2014

THE BOURSE extended its winning streak for the fifth straight trading day yesterday, with the main index ending at a fresh three-month high on optimism spurred by JP Morgan’s upgrade of its Philippine shares rating, analysts said.

The benchmark Philippine Stock Exchange index (PSEi) climbed 58.14 points or 0.92% to close 6,352.76, its highest finish since the 6,355.18 recorded on Nov. 8 last year. PSEi traded as high as 6,353.39 and as low as 6,277.04 during Thursday’s trading.

The broader all-shares index similarly gained 28.20 points or 0.74% to 3,826.50.

“The Philippine Stock Exchange bucked the regional sell-off to gain by 0.92% as the market cheered the upgrade of JP Morgan last Wednesday,” said Nicholas Antonio T. Mapa, market research officer at BPI Financial Markets Group.

Last Wednesday, investment bank JP Morgan upgraded Philippine shares to “overweight” from “neutral” in its global emerging markets model portfolio, saying shares are no longer overvalued and adding that the economy’s robust growth may lead to a surprise in earnings this year.

All sectors edged higher with buying momentum evident, pushing the main index closer to the 6,400 level, Mr. Mapa noted.

Manny P. Cruz, market strategist at Asiasec Equities, Inc., concurred, saying: “Despite weakness in most regional markets, the local market saw continued influx of foreign buying on selected blue-chip stocks after JP Morgan’s upgrade.”

Joanna M. Capiral, analyst at Papa Securities Corp., said “[a]mid negative developments overseas, foreign investors saw the country as a safe haven given our strong macroeconomic fundamentals.”

Other Asian stocks tumbled, Reuters reported, as a grim picture of China’s manufacturing sector heightened concerns on the outlook of the region’s economic powerhouse. HSBC’s preliminary China Purchasing Managers’ Index fell to a seven-month low of 48.3 in February from January’s 49.5, while employment fell at the fastest pace in five years.

Hong Kong’s Hang Seng index plunged 270.44 points or 1.19% to 22,394.08; Japan’s Nikkei 225 index tumbled 317.35 points or 2.15% to 14,449.18; while China’s Shanghai composite index lost 3.77 points or 0.18% to 2,138.78.

Gregg Adrian R. Ilag, analyst at AB Capital Securities, Inc., attributed local market gains to a “spillover of positive sentiment” as investors expect optimism to persist, as recently reported corporate profits were better than expected.

At home, a total of 2.14 billion shares worth ₱9.0 billion were traded from the previous day’s 2.77 billion shares worth ₱8.8 billion.

Advancers beat decliners 90 to 69, while 43 stocks were unchanged.

Foreign buyers continued to outnumber sellers, sending net foreign buying 31% up to ₱1.41 billion yesterday from Wednesday’s ₱1.08 billion.

All counters ended the day in the green. Industrial added 140.28 points or 1.48% to 9,607.30; holding firms gained 66.07 points or 1.16% to 5,757.23; financials rose 14.83 points or 0.96% to 1,562.38; property edged up 17.40 points or 0.72% to 2,418.44; services increased by 5.83 points or 0.31% to 1,898.44; while mining and oil climbed 40.98 points or 0.29% to 14,282.86.

The daily list of the 20 most actively traded stocks showed 15 gained, while five issues lost.

“We may still see some buying momentum, but it might be tempered given that the market is already susceptible to some selling pressure as the index approaches the 6,400 level,” Asiasec’s Mr. Cruz said, placing market’s support at 6,190 and resistance at 6,400. -- Judy Dannibelle T. Chua Co