Stocks fall nearly 7% on profit-taking


The local benchmark stock index on Thursday ended at 6,114 points after slipping 6.75 percent, the steepest dive for the year since its 5-percent drop on Tuesday.

The Philippine stock market index as of yesterday lost about 1,000 points in a span of two weeks, mainly caused by two consecutive declines over two trading days. There was no trading on Wednesday to give way to Independence Day celebrations.

Juanis Barredo, COL Financial technical analyst, said in a phone interview that the almost 7 percent free fall was caused by profit taking as interest rates surged in some countries, especially across Asia.

Also feeling the pinch from the profit-taking were the country’s currency and bonds, Barredo said.

“I don’t think the economic data generated that much damage. It is more on tandem with what’s happening in the foreign market, potentially on interest rates,” he added.

Barredo assured that the fall of the index is nothing to be scared about, because stocks will become cheaper and people will eventually buy slowly until equities regain better prices.

Astro del Castillo of First Grade Finance Inc. attributed the market slide to “jitters from the foreign markets” and the “changing investment landscape.”

The Philippine Stock Exchange index (PSEi) made another significant drop by 6.75 percent or 442.57 points to 6,114.08.

The broader all-shares index was down by 5.63 percent or 228.84 points to 3,834.87.

All indices also dropped, with properties having the steepest at 7.30 percent or 190.88 points to 2,442.74, while holding firms registered a 6.64-percent decline or 389.22 points to 5,472.56.

Services dived by 6.40 percent or 126.95 points to 1,856.69, while mining and oil dipped by 3.32 percent or 533.32 points to 15,519.89.

Also, financials subtracted 105.73 points or 6.27 percent to 1,580.46, while industrials erased 544.29 or 5.41 percent to 9,507.88.

There were only 18 gainers, with 182 decliners. Unchanged issues reached 24. Value turnover was more than P16 billion.

The 10 most active companies that registered 3 percent to 8 percent decreases in their prices were Banco de Oro, SM Prime Holdings Inc., Ayala Land Inc. and Alliance Global Group.

“We’ll continue to look at the international markets as it affects the local index the most. Those are still the triggering factors,” del Castillo said.

On Tuesday, the PSEi dived 318.95 points, or 4.64 percent, to 6,556.65.

The wider all-shares index plunged also on Tuesday by 165.90 points or 3.92 percent to 4,063.71.


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1 Comment

  1. Rosauro Feliciano on

    I want to repost my comment I posted in the past. I was saying that the stock market is a nest of gamblers who anticipate when they will withdraw their investments and when this happens everything is gone. In the stock market many became very rich without hard work; it cannot be compared to an investment like in ship building, or in manufacturing industry.

    At times we refer to the stock market as an implementing arm of our economic development, which is correct at some points in times but at other times it is a disguise of an economic development, and why? Let me explain. There are investors who signified their intention to engage in manufacturing venture (as an example) and surely most of them comply and so they register their business venture with the PSE to raise more capital. However, those who participate in buying stocks are speculators and they are in fact gamblers. These are the people who infuse lots of money and they are wise guys of the worst kind because they withdraw their money at anytime they want leaving the PSE helpless.

    The stock market is a nest of gamblers who forestall economic events and when their key performance indicator tells that their aim is reached they withdraw their money so nothing is good for the economy. This scheme is invented by the worst kind of gamblers who are clothed on a kind of being saints. For those who want to earn their living through hard work will surely have peace of mind because at the end of the day they can see the fruits of their labor. The stock market is a form of gambling disguise as an implementing arm of an economic development.

    Our economic planners surely have learned the bad experience brought about by the so called economic bubbles and so we are lucky to have them in the team of this incumbent government administration. We can expect that our country is moving onward to prosperity with these fellows at the helm of our economy. More power to them! So don’t worry about what is happening in the stock market recently. Our economic fundamental is sound and safe at the hands of honest people who are not tainted with corruption. The stock market is one area where it will show us days of shining sun, but at any day of the week rain will be very strong and this is comparable when the investors start withdrawing their investment plus the fortune they made. The other area is that we continuously have good economic fundamental.