|
By Likha C. Cuevas-Miel, Reporter
FOREIGN interest in the local
stock market fell last year, as net foreign buying declined amid a
slowing US economy and a global credit crunch.
In a statement, the Philippine
Stock Exchange (PSE) said net foreign buying or the difference
between total foreign buying and selling declined by almost 19
percent to P55.55-billion year-on-year due to massive foreign
selling in the final two months of 2007.
Data from the PSE showed that net
foreign selling reached P8.54 billion in November, the second worst
one-month level. Foreigners sold another P8.15-billion worth of
shares the following month for a total of P16.69 billion, the
biggest amount of net foreign selling within two months in the local
bourse’s history.
At the start of 2008, stock
prices fell by 10 percent as net foreign selling reached P11.59
billion, 23.3 percent higher than the level recorded in October
2003.
“If the trend in January
continues, we will lose in just six months all the net foreign
buying we piled up last year,” Francis E. Lim, PSE president and
chief executive, said.
As the story of the slowing US
economy continues to unfold, the local bourse is seen to hit rough
spots within the next three to six months due to risk aversion and
uncertainty in the global markets, analysts said Thursday.
In a briefing, Francisco M.
Liboro, Association of Securities Analysts of the Philippines
president, said the local market may see stabilization toward the
end of this year but may head further south as seen from current
trends.
“Weekly moving averages are in
negative crossover territory, indicating further downtrends in the
medium term, or 3 to 6 months,” he said. The 30-company composite
index, the benchmark of all stock price movements, is now trading
below the critical 40-week moving average, he added.
The analyst said the breakdown
from the near term “channel formation” is evident with target at
3,016 points and from thereon, the market may experience at least a
300-point fall. When the index breaks the 2,650 level, the bull run
has ended, Liboro said. Despite recent trends, the local market
however is supported by sound fundamentals, as the economy grew a
31-year record 7.3 percent last year, he said.
In addition, inflation is
expected to remain benign this year despite a slight uptick during
the first half. Coupled with low interest rates, the equities market
is seen to benefit especially since yields from fixed income
instruments are dwindling, prompting investors to shift to shares of
listed companies.
“Healthy economic and market
fundamentals will provide the support to the market once the present
sub-prime fallout stabilizes and world markets can start decoupling
from Wall Street,” Liboro said.
Share prices slip further
On Thursday, share prices closed
0.2 percent lower as investors opted for caution following another
choppy session on Wall Street, dealers said.
They said trade was light as many
Asian bourses were closed for the Lunar New Year holiday, adding
local political developments, such as accusations against President
Arroyo’s government, pulled down trading too.
The composite index lost 5.64
points to close at 3,223.20 points after moving narrowly between
3,210.53 and 3,228.84.
The broader all-share index edged
up 0.26 point to 1,970.73.
Advancers outnumbered dec-liners
53 to 41, while 58 were steady. Volume amounted to 1.0 billion
shares worth P1.2 billion.
“We’re seeing a fresh wave of
risk aversion. But we’ve seen these [price] levels before, which
means investors are just shrugging off the political uncertainty for
now,” said Jonathan Ravelas of Banco de Oro Unibank.
“Fears of a US recession
continue to dominate trading but investors are also closely
monitoring local political developments,” he said.
“Investors have become even
more cautious since they realize there are no quick and concrete
solutions in sight to improve the weakening US economy,” said Ron
Rodrigo of DBP Daiwa Securities.
Philippine Long Distance
Telephone Co. (PLDT), the country’s biggest company by market
value, was down P10 at P2,940.
Food and drinks giant San Miguel
Corp.’s A-shares, reserved for Filipinos, rose 50 centavos to
P53.50. Its B-shares, which have no ownership restriction, were
steady at P53.50.
The local currency traded at
40.768 to the dollar.
--With AFP
|
