MANILA, 24 February — The volume of trading on the Philippine stock exchange continued to climb over the past week with the improving economic climate in the country.
Unfortunately, the composite index lost 20.45 points on a week-on-week basis with a 1.44 percent slowdown to 1,396.38 points.
Market turnovers rose with total value traded reaching P6.63 billion with an increase of 118.36 percent. Volume turnover also rose 15.84 percent to 7.49 billion shares.
Since the start of the year, the main index has risen over 20 percent on prospects of a better economy, declining local interest rates and hopes that the government would finally stamp out the kidnap-for-ransom Abu Sayyaf group with more equipment and training of local troops by US forces.
“The market was inspired by Ayala Land’s earnings,” said Jose Vistan, an analyst at AB Capital Securities Inc. “The market seems to be awash with cash,” said Vanessa Lim, fund manager at UCPB Trust which has about P30 billion in portfolio assets. Lim said some investors may have shifted investments out of fixed-income instruments to equities because of declining local interest rates.
Astro del Castillo, director of the Association of Securities Analysts of the Philippines, predicted that profit takers would emerge in the market once the index reached 1,450, and they did so even before the middle of last week. The extension in the trading day was not enough to counter this profit taking spree so that the index’s rise lost momentum by midweek, and ended the week on a deficit.
In fact, the stock market ended lower on the first day of extended trading hours with investors stepping in to take profits after eight days of gains. Joseph Roxas, president of Eagle Equities, said traders have been expecting the market to correct after the mild rally, and it was just coincidental that this happened during the first day of longer trading hours. “Not really, this move is for the longer term ... we are a step closer to being portrayed as a world-class equities market,” said del Castillo. “It provides a bigger window of opportunity for investors both foreign and local,” del Castillo said, adding that “the economy moves 24 hours a day and it’s just prudent for the market to complement that and extend trading a bit.”
DBS Vickers associate director of sales Enrique Santa Ana also said the extended session should be judged over the longer term. “I do not think we should judge it on a day-to-day basis ... as long as we provide the availability (to trade longer) it will encourage people,” he said. Others said the longer hours would create more volatility. “The longer hours open up more trading opportunities ... but we cannot immediately expect a major pickup in volumes in one market,” said Summit Securities president and Philippine Stock Exchange Governor Harry Liu. “Foreign investors, in particular, have to be convinced that an economic recovery is under way.” When the market corrected after opening the week by breaking a record, United Coconut Planters Bank Trust fund manager Vanessa Lim said “it was clearly profit-taking, everyone said 1,480 points would prove to be a tough resistance point and that’s what happened.”