Shares decline as net foreign selling continues

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LOCAL SHARES moved down on Monday as foreign investors continued selling their holdings amid concerns in the market.

The bellwether Philippine Stock Exchange index (PSEi) fell 52.97 points or 0.67% to close at 7,771.62 on Monday, while the broader all shares index shed 25.5 points or 0.54% to 4,653.54.

Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a text message yesterday that the market’s decline can be linked to the continuous outflow of foreign funds.

“Net foreign selling today posted P1.08 billion. We’re already running five straight days of foreign fund outflows, three out of which, including today, went beyond the P1 billion mark. This shows that the last MSCI rebalancing results are still weighing on the local bourse,” he said on Monday.

The total net foreign selling of P1.08 billion on Monday is also a jump from Friday’s net outflow of P642.36 million.

“What’s alarming is we closed today below that 7,800 support line. We expect this line to be tested in the next few trading days. Failure to get back above that line would give us a new trading range which is 7,500-7,800,” Mr. Tantiangco added.

For Regina Capital Development Corp. Head of Sales Luis A. Limlingan, the decline of the market was due to developments in the US-China trade talks.

“Philippine shares closed lower after investors shrugged off positive comments on a trade deal by President Donald Trump and his Chinese counterpart Xi Jinping and a better than expected set of flash PMIs (purchasing managers’ index),” Mr. Limlingan said in a mobile message.

Mr. Limlingan was referring to comments of US National Security Advisor Robert C. O’Brien that the “phase one” trade deal with China may still be signed by the end of 2019.

However, Reuters reported Monday that the challenges to conclude the “phase one” trade deal reflects the unlikelihood of a “phase two” agreement, citing officials from both US and China. An unnamed Chinese official was quoted as saying Beijing “can wait” on the trade deal, noting it is US President Donald Trump who wants the agreement anyway.

Despite this development’s effect on the PSE’s main index, most Asian markets ended on green territory on Monday.

Meanwhile, of the sectoral indices at the PSE, only mining and oil advanced as it added 51.24 points or 0.62% to 8,226.67.

The rest declined: industrials by 163.96 points or 1.65% to 9,747.66; property by 36.24 points or 0.89% to 3,996.98; financials by 13.10 points or 0.69% to 1,861.03; services by 8.27 points or 0.53% to 1,541.43; and holding firms by 6.5 points or 0.08% to 7,750.43.

Monday ended with 1.04 billion issues worth P4.68 billion changing hands, down from P5.49 billion on Friday. Stocks that went down outnumbered those that increased, 118 against 68, while 46 ended unchanged. — Denise A. Valdez with Reuters