Stock Market

By Keith Richard D. Mariano

PSEi rebounds on bargain hunting ahead of Fed

Posted on June 16, 2016

PHILIPPINE STOCKS bounced back to the 7,500 level on Wednesday, as investors hunted for bargains amid thin trading before the US Federal Reserve concludes its policy meeting.

The bellwether Philippine Stock Exchange index (PSEi) settled at 7,501.65 after gaining 41.53 points or 0.55% from its previous close of 7,460.12. The broader all shares index, meanwhile, rose by 22.92 points or 0.51% to 4,478.90 yesterday.

The PSEi opened at a weak note, sliding 5.01 points down to 7,455.11. The main index even touched 7,451.56 before rising past the 7,500 mark. Its intraday high was 7,521.6.

All counters, excluding services, swung back to the positive territory after the previous session’s sell-off. The services sub-index dropped by 5.97 points or 0.37% to 1,569.53.

Property stocks gained the most, 58.88 points or 1.83% to close at 3,272.56. Industrial climbed by 73.54 points or 0.64% to 11,516.48; financials by 8.33 points or 0.49% to 1,702.93; holding firms by 24.24 points or 0.32% to 7,412.84; and mining and oil by 10.06 points or 0.08% to 11,647.26.

“The market was up rather on a thin trading volume... There was nothing quite substantial and market-moving,” Luis A. Limlingan, business development head at Regina Capital Development Corp., said by phone.

Value turnover slightly increased to P6.17 billion from the P6.09 billion recorded on Tuesday after 4.54 billion shares exchanged hands.

Foreign investors continued to dump shares, with net selling reaching P525.75 million, up from Tuesday’s P306.03 million.

Advancers outnumbered decliners, 101 to 92, while 46 issues were unchanged.

The PSEi benefited from the correction of property stocks Double Dragon Properties Corp. and Ayala Land, Inc., which surged by 11.31% and 2.29% respectively during the session, First Grade Finance, Inc. Managing Director Astro C. del Castillo said in a separate interview.

“Some opted to bargain-hunt, maybe betting on the possibility of the Fed holding interest rates steady. The sell-off caused by the ‘Brexit’ is already overdue and [index provider] MSCI’s move to exclude Chinese stocks also helped,” Mr. del Castillo said.

First Grade Finance expects the PSEi to trade within the 7,400-7,600 range. Regina Capital maintained the support and resistance levels at 7,400 and 7,550.

“If the Fed decides to hold back, the market will continue its advances, but not so much because of ‘Brexit’ concerns,” Regina Capital’s Mr. Limlingan said.

The United Kingdom will hold a referendum on June 23 to determine whether it will continue to stay in the European Union.

First Grade Finance’s Mr. del Castillo further cited the outcome of the two-day meeting of the Open Federal Market Committee among the possible drivers of today’s trading, as it could give hints on its planned rate hike.