THE PHILIPPINE STOCK EXCHANGE index (PSEi) exited bear territory on Friday amid what one analyst described as “a dizzying rally”, but its strong recovery was not enough to prevent its third straight week-on-week drop.
All six sectoral indices ended the day with gains and while overseas investors remained predominantly bearish, Friday’s net foreign sales were the smallest in 15 trading sessions.
PSEi surged by 248.27 points or 3.48% to close 7,383 — though still down 0.4% on the week — while the all-shares index gained 95.44 points or 2.16% to end 4,507.4.
“After just entering bear territory yesterday, Philippine stocks led regional peers with a dizzying rally that trimmed most of its losses this week,” RCBC Securities, Inc. said in a Stock Market Weekend Cap attributed to research analyst Fiorenze D. De Jesus.
“Investors may have been encouraged by Wall Street’s optimism over reports that China will cut tariff rates on imports from its other trading partners, which would trim the US-China trade war’s impact on global growth.”
For Gabriel Jose F. Perez, sales associate of Papa Securities Corp., “[t]he surge today for countless blue chips… may have been on the back of some bargain buying and in anticipation of the FTSE rebalancing which took effect at the close.”
Mr. Perez mentioned that the local index also followed foreign markets, which “closed in the green after drawing optimism from US markets last night when the Dow Jones hit a new all-time high along with the S&P500.”
Luis A. Limlingan, managing director at Regina Capital Development Corp., shared this assessment saying: “The local [market] made the leap back into bargain hunting, supported as risk-on sentiment returned with US indices closing at record highs and EM (emerging market) funding levels normalizing.”
“Strong economic data helped to alleviate concerns over escalating U.S.-China trade tensions,” Mr. Limlingan added.
Reuters reported on Friday that subsiding global trade worries drove the Dow Jones Industrial Average 0.95% higher to 26,656.98 on Thursday, the Nasdaq Composite Index up 0.98% to 8,028.23 and the S&P 500 up 0.78% to 2,930.75.
AFP reported on Friday that much of Asia strengthened further as investors looked past the worsening US-China trade spat to take heart from signs of a booming American economy. PSEi’s Friday surge outstripped gains elsewhere in Asia, including the Nikkei Stock Average 225’s 0.82%, the TOPIX Index’s 0.92%, the 1.73% of Hong Kong’s Hang Seng Index, the 0.68% of South Korea’s KOSPI Index, the Shanghai Composite Index’s 2.5%, FTSE Bursa Malaysia KLCI’s 0.38% and Jakarta Composite’s 0.45%.
Financials led sectoral indices in gains, surging by 74.35 points or 4.72% to finish 1,649.3. It was followed by property that jumped by 113.16 points or 3.14% to 3,707.99, holding firms that increased by 181.93 points or 2.62% to 7,109.43, industrials that went up by 259.23 points or 2.38% to 11,121.75, services that rose by 30.58 points or 2.07% to 1,505.24, as well as mining & oil that edged up 60.84 points or 0.67% to 9,039.25.
Mining & oil has been reeling from recent reiterations by President Rodrigo R. Duterte of his opposition to mining in the wake of landslides amid the onslaught a week ago of super typhoon Mangkhut, locally called Ompong, that have killed at least 88 individuals, so far, in northern Luzon. On Thursday, however, House Speaker Gloria M. Arroyo sent a stricter mining tax reform bill back to the Finance department, asking it to take industry proposals into consideration, even as she agreed with Mr. Duterte in terms of banning open-pit mining.
Stocks that advanced outnumbered those that lost 114 to 86, while 43 others were flat.
Friday’s list of 20 most active stocks showed 16 gaining and just four that lost.
Those that gained included BDO Unibank, Inc. (7.58% to P120.60 apiece); Aboitiz Equity Ventures, Inc. (6.35% to P46.90); Metropolitan Bank & Trust Co. (6.25% to P68); Universal Robina Corp. (5.96% to P151); MRC Allied, Inc. (5.56% to P0.76); PLDT, Inc. (4.96% to P1,438); Ayala Land, Inc. (4.9% to P41.75) and Bank of the Philippine Islands (4.88% to P83.90 each).
Those on the same list that lost consisted of First Philippine Holdings Corp. (-2.93% to P63.05); Doubledragon Properties Corp. (-1.86% to P21.05); Metro Pacific Investments Corp. (-1.6% to P4.92) and Security Bank Corp. (-0.3% to P168.50 each).
Volume ballooned to 1.197 billion shares worth P11.582 billion from Thursday’s 792.146 million worth P4.588 billion.
Overall pessimism persisted among investors overseas, although Friday’s P132.151-million net foreign sales was just a third of Thursday’s P385.705 million, as total acquisitions surged 232% to P7.617 billion and total sales jumped 189% to P7.749 billion.
Next week, Papa Securities’ Mr. Perez expects net foreign selling to persist, noting that investors will likely remain cautious ahead of the monetary policy meeting on Thursday in which an additional increase in benchmark interest rates will likely be on the cards as inflation speeds further. Some economists expect farm damage from last week’s super typhoon to add to inflationary pressures.
“Nevertheless, initial resistance should be at the PSEi’s recent breakdown area of 7,478.94.” Mr Perez said. — Vincent Mariel P. Galang

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