PSE index ekes out small gain on bargain hunting
THE PHILIPPINE Stock Exchange index (PSEi) looked set to extend its slide on Wednesday, but bargain hunting allowed it to change course to end the session with a slight gain.
The bellwether PSEi posted a 51.78-point gain or 0.63% to finish at 8,221.92. The broader allshares index gained 19.23 points or 0.39% to end at 4,851.09.
“Philippine investors continued to clean and rebalance their portfolios ahead of the window dressing and the addition of RRHI ( Robinsons Retail Holdings, Inc.) into the 30- member index. However in this instance, they turned to bargain hunting on market on close,” said Luis A. Limlingan, business development head at Regina Capital Development Corp.
On Tuesday, the PSE announced that Lopez-led Energy Development Corp. ( EDC) had been removed from the PSEi as its free float level fell below the 12% minimum requirement to qualify as a main index constituent.
EDC will be replaced by the Gokongwei’s RRHI, which was listed in November 2013. The retail company is the fifth stock from the services sector that is part of the PSEi.
Shares in EDC on Wednesday climbed by 12.92% to P5.42 each after falling by 20% to P4.80 the other day. RRHI slipped by 1.5% to P98.50 yesterday. EDC was the most active stock during the session, followed by RRHI.
Harry G. Liu, president of Summit Securities, Inc., said the market started to correct towards the end of the session after being down in the last few days.
He said he was looking at the same fundamentals to propel the PSEi’s ascent, as well as initiatives to “reform” the tax system and the government’s push towards more infrastructure spending.
Regina Capital’s Mr. Limlingan said investors also took caution after Federal Reserve Chair Janet Yellen said gradually raising interest rates is the most appropriate policy approach amid higher uncertainty about inflation.
He said Ms. Yellen’s stance reinforced the US central bank’s forecast of another rate hike this year.
“Investors now see a roughly 70% probability of a hike at the Fed’s December meeting, up from 63% on Monday,” he said.
Five of the six sectoral indices ended the trading day in the green, led by industrials, which moved up by 112.27 points or 1.02% to 11,122.07.
Holding firms likewise rose by 43.43 points or 0.52% to end at 8,328.40; property stocks gained 19.25 points or 0.49% to 3,879.68; mining and oil stocks rose by 67.31 points or 0.48% to 13,932.70; while financials inched higher by 7.86 points or 0.4% to 1,972.74.
Services was the lone counter to end in the red, dropping 12.07 points or 0.7% to 1,693.7.
Foreign funds sold more stocks than they bought, resulting in a net selling of P1.93 billion, or bigger than the previous day’s P1.16 billion.
Value turnover reached P10.46 billion, up from billion the other day. Advancers outnumbered decliners at 106 to 103, while 39 stocks finished unchanged. •