SHARES of China Banking Corp. (Chinabank) surged last week ahead of its reentry to the Philippine Stock Exchange index (PSEi) today.
Data from the Philippine Stock Exchange showed that the bank was the most actively traded stock in value terms last week, with 76.39 million shares worth P6.51 billion changing hands from Jan. 27 to 31.
The lender’s shares closed at P93 on Friday, up 33.8% or P23.50 from a week earlier. This marked a 46.5% increase from its previous close of P63.50 on the last trading day of 2024.
Claire T. Alviar, assistant manager for Research and Online Engagement at Philstocks Financial, Inc., attributed the stock’s performance to Chinabank’s inclusion in the PSEi.
“Additionally, we believe the anticipation of strong earnings results from Chinabank further contributed to the upward momentum in its share price,” Ms. Alviar said in a Viber message on Friday.
On Jan. 24, the PSE announced Chinabank’s return to the main index, marking its comeback since its previous stint from May 2010 to 2011. Chinabank starts trading on the main bourse today, Feb. 3.
AREIT, Inc., the first real estate investment trust to enter the PSEi, also joins the index for the first time. They replace Nickel Asia Corp. and Wilcon Depot, Inc., which are moving to the PSE MidCap index.
Ms. Alviar noted the market’s positive reaction, saying Chinabank’s inclusion is “expected to attract increased attention from large funds and institutional investors.”
“This shift in investment focus could drive higher demand for CBC shares, potentially leading to an upward price movement,” she added, referring to the bank’s ticker symbol.
Being part of the PSEi, she said, is generally a significant advantage as index constituents typically experience greater liquidity and demand compared to non-index stocks.
Jeconiah S. Nicolas, research analyst at First Resources Management and Securities Corp., said Chinabank’s shares had been gradually gaining momentum in recent months due to speculation about its PSEi re-entry.
“CBC’s share price significantly jumped as funds tracking the index adjusted their portfolios to reflect the recent PSEi rebalancing,” he said in a separate Viber message.
Chinabank’s attributable net income rose 29.4% to P6.93 billion in the third quarter of 2024, bringing its nine-month earnings to P18.37 billion, a 13.5% increase.
Ms. Alviar identified a “psychological resistance level” at P100, with support at P70.
Mr. Nicolas agreed with the P100 resistance level, setting support at P83, or 5% below its closing price of P93 on Friday. — Kenneth H. Hernandez
