PHL stocks sink further into bear market territory

THE MAIN INDEX sank deeper into bear territory on Thursday, as investors favored international markets versus placing their investments in the country.

The bellwether Philippine Stock Exchange index (PSEi) extended its decline yesterday, plunging 1.19% or 86.50 points to close at 7,134.73. The broader all-shares index likewise dropped 0.96% or 42.75 points to 4,411.96.

Thursday’s close marks a 21% drop from the PSEi’s peak of 9,078 recorded last January. The main index officially entered bear territory on Wednesday after it fell back to the 7,200 level, or 20% lower than the previous record high.

“No end in sight for the selldown as the Philippines was still viewed as a riskier asset class versus the more developed US economy. In fact, US stocks closed mostly higher Wednesday as investors took escalating trade tensions in stride to instead focus on improving economic fundamentals,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile message.

Analysts also warned of the inflationary pressures seen from the effects of typhoon Ompong, which ravaged parts of Northern Luzon last weekend. Agricultural damage reportedly now reached P14 billion, which may hamper economic managers’ expectations of inflation slowing in the fourth quarter.

Sectoral counters closed in the red once more. Holding firms led the decline, losing 1.71% or 120.93 points to 6,927.50, followed by mining and oil which gave up 1.42% or 129.65 points to 8,978.41. Property dropped 1.36% or 49.57 points to 3,594.83; services shed 1.24% or 18.60 points to 1,474.66; industrials went down 0.27% or 29.62 points to 10,862.52, while financials slipped 0.14% or 2.32 points to 1,574.95.

“The balance of payments (BoP) surplus data which came in [Wednesday] afternoon was not enough to calm investors into buying back into the market [on Thursday],” Mr. Limlingan added.

The country’s BoP position reverted to a huge surplus in August as the Philippines raised fresh funds from yen-denominated bonds, although the eight-month tally still remained negative.

The Philippines’ external position settled at a $1.272-billion surplus last month, turning around from the $455-million deficit in July and the $7-million deficit logged in August 2017, the Bangko Sentral ng Pilipinas reported on Wednesday.

Despite the positive print last month, the year-to-date BoP tally still ended at a $2.44-billion deficit. This is wider than the $1.391billion shortfall posted as of August 2017, and is still wider than the $1.5-billion deficit expected for the entire 2018.

Some 792.15 million issues switched hands, resulting in a value turnover of P4.59 billion, slightly lower than the previous session’s P5.49 billion.

Decliners outpaced advancers, 113 to 82, while 33 names remained unchanged.

Foreign investors recorded net sales of P385.70 million, lower than the Wednesday’s P636.47 million.