PH stocks buoyed by FTSE rebalance

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Philippine equities rose slightly at the end of Friday trade as buyers aligned themselves with the repositioning in other markets to take advantage of the rebalancing of London’s benchmark FTSE index.

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Despite trading in negative territory for most of Friday’s session, the Philippine Stock Exchange index (PSEi) closed with a 3.83-point gain, up 0.05 percent at 7,818.38, while the All Shares index added 8.53 points, or 0.19 percent to 4,529.31.

Miguel Agarao, investment analyst at Wealth Securities Inc., said the market was mostly in the red during the session but the losses were offset in the latter part of trading “because the deadline of the FTSE rebalancing was today.”

The Financial Times Stock Exchange index consists of 100 top stocks traded on the London Stock Exchange, and is rebalanced on an annual basis.

Investors generally adjust their portfolios as needed to maximize changes in the weightings of stock components of the FTSE index when rebalancing takes place.

“Volatility in the US markets is already leading to higher volatility in other equity indices, the PSEi included,” Agarao added, referring to expectations that the local market will be in a correction mode over the next few days.

Wall Street ended mixed in overnight trading on Thursday, with the Dow Jones Industrial Average down 117.16 points, the S&P 500 shedding 10.23 points, and the tech-heavy Nasdaq posting a moderate gain of 9.55 points.

Jason Escartin of F. Yap Securities Inc. said that the local stock index inched upward late in Friday’s session “as players digested other catalysts that could ramp up the market above 7,850.”

“Declines stood limited overall, as investors have priced in the Fed’s modest interest rate increase by the second half,” Escartin said, referring to market speculation about the US Federal Reserve’s policy shift later in the year.

The industrials sub-index posted a gain of 0.69 percent on Friday, while the holding firms and services indices closed lower.

Active gainers included Universal Robina Corp., Semirara Mining and Power Corp., Security Bank Corp. and D&L Industries Inc., while notable decliners were San Miguel Corp., Megaworld Corp., Philippine Long Distance Telephone Co., Ayala Land Inc., Energy Development Corp., and SM Investments Corp.

Total volume stood at 1.44 billion shares, valued at P9.08 billion. Decliners significantly outnumbered advancers despite the market’s gain, 109 to 73, while 40 issues were unchanged.

On Thursday, the main PSEi finished up 0.75 percent, or 57.97 points at 7,814.55, while the All Shares index gained 0.48 percent, or 18.59 points to 4,520.78.

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