Stock Market

Stocks eke out modest gains on bargain hunting

Posted on May 05, 2016

SHARES closed slightly higher on Wednesday after an eight-day losing streak as investors picked up cheap stocks while staying on the sidelines just a few days before the national elections.

The bellwether Philippine Stock Exchange index (PSEi) rebounded at 35.29 points or 0.50% to settle at 7,081.86, while the broader all-shares index gained 7.95 points or 0.18% to close at 4,205.88.

Alexander Adrian O. Tiu, research analyst at AB Capital Securities, Inc., said in a phone interview: “The market’s rebound was mainly due to bargain hunting. Since investors find the market cheaper as of the moment, the normal thing for them to do is to buy more stocks thus increasing the market.”

“Corporate earnings for the first quarter are also on the sidelines due to uncertainties with the upcoming elections,” added Mr. Tiu.

Lexter L. Azurin, head of research at Unicapital Securities, Inc., said separately by phone: “The rebound in the market was caused by last minute buyings on selected stocks.”

“JG Summit Holdings Inc., SM Prime Holdings, Inc. and PLDT, Inc. were the main contributors who accounted for the market increase,” Mr. Azurin said.

Subindices were mixed, as three inched higher while the others declined.

Leading advancers was the holding firms counter, which gained 33.80 points or 0.48% to 6,964.53. Industrial rose by 51.23 points or 0.44% to 11,684.90; and property increased 10.77 points or 0.37% to close Wednesday’s trading at 2,913.77.

In contrast, mining and oil gave up 181.15 points or 1.64% to finish at 10,865.36, leading losers. Financials shed 1.90 points or 0.11% to close at 1,591.43; and services fell by 0.49 point or 0.03% to end at 1,462.56.

Value turnover was almost flat, ending at P6.55 billion after 2.72 billion shares changed hands, from Tuesday’s P6.56 billion.

Net foreign buying amounted to P443.45 million yesterday, surging from the P30.31 million seen on Tuesday.

AB Capital Securities’ Mr. Tiu said: “We might see a continuous rebound for the rest of the week primarily due to the elections.”

“We will be able to see range trading for the next few days as we approach May 9,” Unicapital Securities’ Mr. Azurin said.

Most Southeast Asian stock markets also fell on Wednesday on renewed global growth concerns, while Indonesian shares extended their losses after data showed the country’s economy grew at a slower-than-expected pace in the first quarter.

Singapore’s stock index fell 1.6% as shares of Singapore Telecommunications Ltd. and Oversea-Chinese Banking Corp. Ltd. extended losses.

Indonesia’s Jakarta Composite Index fell 0.9% after the Indonesian statistics agency reported first-quarter growth of 4.92%.

Bucking the trend, Malaysian shares rose 0.1%. -- Tanya Mae B. Umali with Reuters