THE PHILIPPINE Stock Exchange index (PSEi) closed on Friday at its lowest level since nearly the start of the year as investors sold heavily amid portfolio adjustment in the face of MSCI rebalancing and after US-North Korea talks in Vietnam this week failed to yield denuclearization progress.
PSEi dropped 63.72 points or 0.82% to end 7,641.77 — down 0.04% on the week — while the all-shares index gave up 39.82 points or 0.83% to finish 4,729.93.
“Our index fell today as the MSCI index rebalancing takes effect,” Timson Securities, Inc. Trader Jervin S. De Celis said in a mobile phone message, noting that PSEi’s Friday finish was the lowest since Jan. 3’s 7,680.
“This is also the main reason why our index tanked yesterday as investors rebalance their holdings.”
Citing “rising representation of (China) A shares [which are sold in both the Shanghai and the Shenzhen stock exchanges] in global indexes, together with our observation that EM/APxJ funds are currently underweight,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a text message that MSCI rebalancing “could… create active allocation demand to China A…”
Thursday saw the three main Wall Street indices retreat as “better-than-feared US GDP data was countered by concerns about earnings and US-China trade relations”: Dow Jones Industrial Average by 0.27%, the S&P 500 by 0.28% and the Nasdaq Composite by 0.29%, Reuters reported.
Most major Asian indices ended up on Friday however, with Japan’s Nikkei 225 and TOPIX rising by 1.02% and 0.50%, respectively; the Shanghai SE Composite increasing by 1.8% and Hong Kong’s Hang Seng going up 0.63%.
South Korea’s KOSPI, however, sank 1.76%.
“… [T]he United States and North Korea gave conflicting accounts and exchanged blame on Thursday after a second summit meeting between President Trump and the North’s leader, Kim Jong-un… ended abruptly without any agreement on nuclear disarmament or easing tensions on the Korean Peninsula,” Mr. Limlingan said.
All six sectoral indices lost: mining & oil by 132.03 points or 1.55% to 8,359.73; financials by 24.77 points or 1.45% to 1,683.39, property by 55.73 points or 1.4% to 3,925.99, services by 16.57 points or 1.07% to 1,518.42, holding firms by 32.15 points or 0.41% to 7,692.97 and industrials by 3.39 points or 0.03% to 11,338.01.
Losers outnumbered stocks that advanced 114 to 64, while 60 others ended flat.
Value turnover was nearly halved to P8.473 billion from Thursday’s P17.58 billion as 1.655 billion shares changed hands.
Foreigners turned bearish, making Friday end with P1.644-billion net selling compared to Thursday’s P3.724-billion net buying. — J. C. Lim

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