Local stocks succumb to profit-taking
By Dr. ANNEGIRL G. BERIN
Investors were all smiles throughout the most part of the trading week until yesterday, when the local bourse bled 59.14 percent of what it gained during the week, closing at 3,162.82 Friday, a loss of 112.37 index points based on previous day’s performance. This may be attributed to the sharp decline of American and Asian stocks as oil firms hemorrhaged on lower oil prices. In addition, most investors decided to reap their profits after a six-day rally and dispose off blue chip Philippine Long Distance Telephone Company (PLDT) after it edged a record high of P2,795 last Thursday.
Earlier during the week, the index continued to soar to its zenith in nearly a decade breaching almost 3,280 level, its best finish since March 13, 1997, on positive economic performance and bright corporate outlook.
Treasury bills (T-bills) rate declined to a new record low from 3.795 percent at the January 8 bid to 3.17 percent last Monday. The benchmark T-bills rate form as basis or reference for loan interest rates, thus, bolstering demand for property and banking stocks.
Security Bank, which offers twenty five (25) year mortgages increased 6.47 percent to P74 yesterday relative to its previous week’s close of P69.50.
Blue chip Philippine Long Distance Telephone Company (PLDT) continued its upbeat performance, soaring to a record high of P2,795 a share, an increase of 9.61 percent based on its last week’s close of P2,550 on the back of high volume, fueled by a 0.9 percent advance in the company’s American depositary receipts during the first trading day of the week.
The trading week’s bullish performance was also anchored on Fitch Ratings’ announcement that the Philippines’ fiscal consolidation was "impressive." However, Mr. James McCormack, Fitch’s senior analyst, expressed concern over the sustainability of reforms over the medium term.
Corollary to this, Bangko Sentral ng Pilipinas (BSP) increased its foreign exchange reserves forecast buoyed by overseas Filipino workers (OFW) remittances, rising exports and investments. According to BSP Governor Amando Tetangco Jr., these sources will boost the country’s foreign currency reserves this year to a record high of $ 25 billion, which is higher than the $ 24 billion the central monetary financial institution pegged last November.
There was no stopping the upsurge of the local stocks index until Thursday, as it continued to soar on the same factors, spurred by demand from global funds obtaining investments in stocks and other equities. Based on reports, global funds were the largest source of net purchasers of equities in more than a fortnight, which in effect strengthened the peso.
Import data were also in the green as overseas purchases increased 13.4 percent to $ 4.51 billion in November, after a 12.5 percent gain in the previous month. Sixty seven (67) percent of these imports are used to produce computer parts for exports.
Overall, it may be a green light to our investors to proceed with caution so that we can all rally for a more robust market and sustain the uptrend while we continue to reap the fruits of the country’s upbeat economic performance and sound fiscal fronts.
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