Philippine stock market manages close above its crucial 2,600 level
- Source: Xinhua
- [09:44 July 23 2009]
- Comments
The Philippine market managed close above its crucial 2,600 level on Wednesday pushed up mainly by investors' continued optimism and select issues.
The bellwether Philippine Stock Exchange index climbed by 0.72 percent or 18.87 points to 2,612.38, while the all share index went up by 0.5 percent or 8.32 points to 1,664.61.
Trading remains within average where some 3.02 billion shares worth 2.83 billion pesos (58 million US dollars) were exchanged. Foreign investors continue to be net buyers at 162 million pesos ( 3.37 million US dollars).
Two of the six subsector indices lost their value. Financial stocks dipped by 0.14 percent or 0.82 points to 571.37, along with the service sector which shed 0.02 percent or 0.37 points to 1,337. 46, pulled down mainly by heavyweight Philippine Long Distance Telephone Co. which lost 0.21 percent of its value or 5 pesos (0. 10 US dollar) to 2,365 pesos (49.19 US dollars).
Mining and oil stocks meanwhile went up the most, surging by 4. 33 percent or 285.64 points to 6,880.68.
More stocks gained than lost 85 to 33 while 55 shares did not move.
"There were certain issues in the 30-company index that made record performances. That is where most of our play is. The US market also continues to remain stable and this is somewhat assuring investors that it is still safe to put their money in the equities," Claire Quiray of Analyst-Traders Equities Training Center said in an interview.
Among the stocks that broke out on Wednesday include Philippines' largest power distributor Manila Electric Co. which has again posted another record high of 199 pesos (4.13 US dollars) or 5.85 higher. It was also the most actively traded stock on Wednesday after securing 12.5 percent of the overall market transaction.
Aside from the power distributor, shares of its former-owner- turned-minority-shareholder First Philippine Holdings Corp. of the Lopez family--one of Philippines' most influential scions--also posted a one-year record high of 37 pesos (0.76 US dollar) after climbing by 2.77 percent or a peso (0.02 US dollar).
Because of the Philippine market's six consecutive day rally, Quiray said it has now reach and overbought level making it prone to profit taking. Its next target of 2,720 will also be an uphill climb for the market which Quiray said continues to show some volatility.
"There are still investors who do not want to take advantage of the market. The local equities remain snappy which is why we see it opening strong only to succumb to intra-day profit taking," Quiray said, pointing out that the market might find it hard to sustain above its current level.
But the saving grace will come from the US market especially if it continues to show some stability, she said.
"If the US market continues to show indication that there is support, local investors might also trust the local market and this will allow it to climb some more. Investors nonetheless are hanging on because the bigger markets are showing some resiliency, " Quiray said.
"The market is getting its energy from abroad. There is no catalyst locally," Quiray added.
The analyst said some indicators, like the improving turnover and the net foreign buying, are very positive and this might make investors ignore the overbought level of the Philippine market.
"There is indeed still room for a rally," Quiray said.
Stocks in the 30-company index performed mixed.
Shares of Philippines' largest property developer Ayala Land, Inc. remained at 8.90 pesos (0.18 US dollar), while its counterparts either lost or improved their values.