MANILA, 2 September — Instead of moving up, the Philippine stock market began a gradual descent into a ten-month low because of thin trading.
Traders said the market began the week with trading at a virtual standstill as the bourse waited for the release of second quarter GDP (gross domestic product) numbers which were expected to spark a rally as they would be about 2.25 percent higher.
This did not come true and the week ended with the composite index receding 20.63 points or 1.6 percent to 1,265.44 points. Market turnovers were also thin with value traded experiencing a 29 percent loss and reaching only 1.75 billion pesos ($33.9 million). Volume was down by 40.15 percent at 3.38 billion shares.
“The market’s consolidation is still going on but you can see some blue chips are just down slightly so the market might be starting to stabilize,” said Tower Securities trader Teresa Lee-Jahrling.
“The GDP numbers are coming out. If it turns out the numbers are good, that we won’t be in a recession, then there’s some room for a technical rebound,” she said earlier in the week.
“There’s nothing new happening to the economy, and then you hear of new negatives, such as a priest being killed, new kidnappings... What investment climate are we offering?” said Enrique Santa Ana, associate director for sales at Vickers Ballas Securities.
Even if GDP figures confirm the country is not going into recession, there was more concern about the economy’s performance for the rest of the year considering that the US economy remains slow, Santa Ana said. “Let us not fool ourselves with flimsy economic figures...It has to take positive economic activity to break the trend (in the stock market),” he said.
The expected GDP increase was even higher than expected at 3.3 percent, but analysts said the growth had yet to clearly filter through to an uptick in people’s income.
“The numbers are good but I guess people want to feel it in their pockets first, “ Eagle Equities President Joey Roxas said.
There was a slight rally on the market’s last trading day last week but traders said this was mostly bargain hunting and month-end window dressing by some funds which still have holdings in the battered market.
“Bargain hunting or end-month window dressing, both scenarios can be taken well. Prices have fallen so much, people are looking at these levels as a target more than a support,” said Larry Lirazan, marketing manager of Worldsec Securities International. “The market hit some kind of comfort zone and it is holding, so people are buying... But I’m sure they will take profits anytime they see an opportunity especially since the market is so thin,” he added.
