By: Krista Angela M. Montealegre, InterAksyon.com November 20, 2013 4:29 PM
MANILA – Philippine share prices plunged on Wednesday to break a key technical support level, bringing the composite index to its lowest level since September.
At the Philippine Stock Exchange, the benchmark index plummeted 112.51 points or 1.80 percent to close at 6,155.24, its lowest finish since closing at 6,133.24 on September 13. All counters shed at least 0.80 percent with the property index falling 2.88 percent.
There were nearly four decliners for every advancer, while 39 issues were unchanged. A total of 2.04 billion stocks worth P9.87 billion changed hands.
Most actively traded stocks were ICTSI, SM Investments, Metrobank, Alliance Global and Robinsons Retail. Top gainers were Lorenzo Shipping, F&J Prince B and House of Investments, while the biggest losers were Benguet B, Vivant and AG Finance.
"I think it has to do with us breaking the 6,200 level. Technicians were looking at that support,” said April Lee-Tan, research head at COL Financial Group Inc.
"If you look at the past few weeks, tuloy-tuloy ang foreign selling. Rather than looking at today as an isolated case, it's about a lot of factors. As far as fund selling is concerned, it has been ongoing for quite a bit," Tan said, adding that foreign funds have been in net foreign selling territory since August.
"Although the magnitude of the selloff narrowed in September and October, we note that the total for the first two weeks of November already equals the total for the full-month of October. The question then begs, are foreigners simply booking their profits, and rebalancing their portfolio allocations, or are they sensing that better opportunities are emerging on the other side of the globe?" said Jun Calaycay of Accord Capital Equities Corp.
The string of initial public offerings (IPOs) that siphoned off liquidity from the system, corporate earnings that have been in line with expectations, expectations of higher interest rates next year and growth concerns following the onslaught of typhoon 'Yolanda' may have triggered today’s "technical breakdown," Tan said.
She added that a rally is still possible before the end of the year because the concerns weighing on the market are quite short-term in nature.
"Developed economies are showing signs of a turnaround and if you compare GDP to GDP, we're still stronger," Tan said.
GDP refers to gross domestic product, which is the amount of final goods and services produced in the country and as such measures economic performance.
The only challenge to the Philippines’ macrofundamentals at the moment is valuing the typhoon's impact on the overall economy, said Calaycay.
"It doesn't help sentiment that’s shaky at this point. Confidence has been hurt," Tan said.