PSEi wipes out 2016’s gains as selling continues

THE MAIN INDEX erased all its gains for the year thus far, starting the week in the red as foreign investors continued to dump shares amid persisting global uncertainties and as weak earnings from local corporates further dragged market sentiment.

The Philippine Stock Exchange index (PSEi) plunged by 103.61 points or 1.48% to settle at 6,871.48 on Monday, completely wiping out all its gains from its end-2015 close of 6,952.08 points. The all-shares index also dropped 49.29 points or 1.16% to 4,170.92.

Luis A. Limlingan, business development head at Regina Capital Development Corp., said the decline “was mainly caused by strong selling pressure from foreign investors” continuing last week’s downward trend.

“Investors accelerated outflows and local investors were unable to support the market... it’s a continuation of the sell-off momentum last week [ and] on increased expectations that the US Federal Reserve would raise rates next month,” Mr. Limlingan said in a phone interview.

“Shares fell due to the same sentiment from last week were investors were caught off guard by the result of the US elections,” Victor F. Felix, equity analyst at AB Capital Securities, Inc., said by phone.

“Earnings also came weaker than expected, particularly PLDT, Inc.,” he added. Net profit of the telecommunications giant was down 49% in the third quarter to P3.402 billion. Its consolidated net income for the fist nine months also went down to P15.9 billion from last year’s P25.355 billion.

Foreigners continued to dump their shareholdings, as net selling reached P1.691 billion, although less than Friday’s P2.47 billion.

All sub-indices ended lower on Monday, with services leading the bloodbath with a 38.18-point or 2.82% decline to 1,311.22. Property was down by 58.40 points or 1.9% to 3,004.66; financials by 24.11 points or 1.39% to 1,700.18; holding firms by 70.68 points or 1% to 6,986.60; industrials by 108.29 points or 0.97% to 11,059.94; and mining and oil by 50.31 points or 0.42% to 11,677.48.

Value turnover decreased to P7.34 billion from Friday’s P9.48 billion after 986.46 million shares changed hands. Decliners beat advancers, 140 to 48, while 39 issues were unchanged.

For today, both analysts said the stock market might see continued cautious trading.

“I think we might see a continuous sell-off as investors track overseas developments and await the Philippine Q3 GDP ( gross domestic product) numbers. We might see 6,800 as the support and 7,000 on the resistance but more on the downside,” AB Capital’s Mr. Felix said.

For Regina Capital’s Mr. Limlingan, the PSEi could trade within the 6,700-6,900 range and “retest the 6,850 support.”

Official GDP data will be released on Thursday by the Philippine Statistics Authority.

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