Stocks rebound as mart positions ahead of MSCI
LOCAL STOCKS recovered on Tuesday as investors rebalanced their portfolios in preparation for the MSCI index review.
The 30-member Philippine Stock Exchange index (PSEi) gained 36.28 points or 0.47% to close at 7,761.29. The broader all-shares index was also up by 24.62 points or 0.51% to reach 4,790.05.
“Our index trailed other Asian markets and closed positive today as Trump’s visit to Japan bolsters hopes on better trade deals between the two economies. Volume today is also up as fund managers rebalance their portfolios a week before the effective date of the semi-annual MSCI index review,” Jervin S. de Celis, equity trader at the Timson Securities, Inc., said on Tuesday.
US President Donald J. Trump ended his four-day visit to Tokyo on Tuesday. He said there will be a trade announcement from both sides sometime in August and the trade gap between the two can be resolved rapidly.
Meanwhile, continuing trade tension between the US and China kept investors in most Southeast Asian markets on the sidelines.
“Market players continue to tread water and await further cues on the trade front as President Trump downplays the likelihood of a deal with China anytime soon,” a note from ING said.
Meanwhile, MSCI’s quarterly review of index weights will take effect on June 3.
Papa Securities Corp. Sales Associate Gabriel Jose F. Perez, in an e-mail on Tuesday, shared the same sentiment: “There we have it, MSCI’s rebalancing actually ended up leading the index to close in the green, up 36.28 points to close at 7,761.29. As expected, volume was high at 18.0 billion because of today’s event.”
“What’s striking, however, is the P600 million in net foreign selling, which could be lower than what people expected today’s print would be,” Mr. Perez added.
Some 1.52 billion issues valued at P18.02 billion switched hands on Tuesday, higher than the previous session’s P5.53 billion.
Foreign investors were net sellers for the 17th consecutive day at P632.59 million, versus Monday’s net sales worth P388.98 million.
Most sector counters finished in the green. Property gained by 63.67 points or 1.52% to close at 4,236.28; industrials went up 25.95 points or 0.23% to 11,140.25; services rose 15.38 points or 0.93% to 1,656.17; and mining and oil gained 9.39 points or 0.13% to close at 7,247.59.
Meanwhile, the holding firms sub-index went down 0.55 point or 0.007% to close at 7,386.99, while financials went down 5.84 points or 0.34% to 1,696.55.
Advancers outnumbered losers, 100 to 80, while 53 issues were unchanged.
“With MSCI out of the way, issue to look now would be how US markets end up faring tonight, especially with how they’re coming back from the Memorial Day holiday. Movement tonight could also influence how the PSEi moves tomorrow,” Mr. Perez said on Tuesday. — Vincent Mariel P. Galang
