27 June 2013

Time to Buy Phil. Stocks?

Stock Exchange
It may be a good time to purchase Philippine stocks today and in the next couple of weeks as the market just entered a benchmark equity index slumped for the fifth consecutive days already. This was primarily brought about by the biggest monthly foreign sell-off on record.

According to the Bloomberg report, the Philippine Stock Exchange Index (PCOMP) fell 2 percent to 5,854.13 at 10:48 A.M. in Manila. The gauge has lost 21 percent since closing at a record 7,392.20 on 15 May 2013. Overseas funds sold a net US$ 344 million of Philippines stocks this month until 24 June, heading for the biggest monthly selloff since Bloomberg began compiling the data in 1999.

Ayala Corp. (AC), owner of the nation's largest builder and biggest bank by market value, sank to a three-month low.

Philippine stocks have slumped from a record as overseas investors sold off the nation's equities after U.S. Federal Reserve Chairman Ben S. Bernanke said the central bank could consider paring stimulus if the country's employment market showed sustainable improvement. On 19 June, he said the central bank may start reducing bond purchases and end the program in 2014 should risks to the U.S. economy abate.

International Container Terminal Services Inc., the nation's biggest port operator, sank 3 percent, while Megaworld Corp. (MEG), a builder of residential towers and offices for call centers, declined 2.9 percent, heading for the lowest close since 3 January this year.

Many analyst believe that the slump was not really caused by any deterioration in the country's economic outlook or by grim market scenarios, but by consumer expectations that the U.S. will taper monetary stimulus.