Philippine Stock Market Wrap-up Report October 26, 2018

Manila, Philippines – The Philippine Stock Market rebounded today following the bounce in the US markets last night.

The index closed at 7064.33, higher by 97.49 points or 1.40 percent. The broader all-share index was higher by 1.20 percent.

Most of the sub-indices were up for the day except for the Mining and Oil sector.

The best performing sector is the Holdings sector falling by 2.14 percent. The Property sector follows with a drop of 2.07 percent.

Within the Holdings sector, SM led the sub-index higher as it closed at 895.0. The figure is higher by 4.07 percent versus yesterday’s close.

Meanwhile, AC locked at 920.0, which is higher by 3.37 percent. SMC ended the trade at 164.50, increasing by 2.94 percent. COSCO closed at 20.95 with a 2.20 percent rise.

Within the Property sector, SMPH led the sub-index lower as it closed at 34.50. The amount is higher by 2.37 percent versus yesterday’s close.

Furthermore, ALI ended the trade at 38.75, increasing by 1.97 percent. MEG closed at 4.41 with a rise of 2.56 percent. RLC locked at 65.30, a 1.80 percent increase.

Which Stocks Traded the Largest Volume?

The most active stocks today include URC with PHP 364.10 million in traded value. ISM made it to the top gainers with a traded value of PHP 277.41 million. ALI also had PHP 247.26 million in traded value.

Gainers and Losers for the Day

Significant gainers for the day include NOW, which is higher by 10.09 percent, ECP by 9.80 percent, ISM by 7.48 percent, IRC by 7.14 percent, and WEB by 4.59 percent.

On the other hand, the notable losers include X by 6.67 percent and STR by 5.39 percent.

There were 80 advances and 99 declines, while 56 names remain unchanged. Value turnover totaled PHP 4.47 billion. Foreign exchange rate stood at USD 1: PHP 53.80.

Financial System Strong

Bangko Sentral ng Pilipinas (BSP) stated that even amidst external uncertainties, the country’s financial system is sound and is poised to sustain growth in the coming years.

Most of the financial metrics such as deposits, loans, investments, capital accounts, assets, and core income have grown by double digits.

The central bank added that the continued growth illustrates the resilience of the economy even with foreign uncertainties.

Non-performing loans are still low at 1.90 percent despite the expansion on banks’ loan portfolios as they remained prudent. They have maintained a “satisfactory” asset quality.

Some of the external risks the BSP has identified include the trade war between China and the US, rising inflation expectation, oil price hike, and faster-than-expected rate hikes in the US.

Most of the financial system’s resources in the first half came from the banking system. Most of the funds were channeled to loans rather than investments.

The banks still prefer interest-based revenue and instruments with long maturities. It enables them to avoid market-to-market losses in a high-interest environment.

Core lending for the first six months grew by 16.70 percent. These lending were mostly allocated to wholesale trade, household, real estate, manufacturing, and utilities.

Most banks have a good capital adequacy ratio, averaging at 15.20 percent.

This figure is above the minimum requirement of the BSP at 10 percent, and the 8 percent requirement by the Basel 3. It shows that banks are prepared to withstand shocks in their balance sheets.

A Possible Higher Low

The index bounced after three consecutive days of red candles. The moving averages still aligned bearishly with the 15 EMA and 20 SMA as immediate resistance.

A possible higher low is now in place. Should a higher high be recorded, this may show that an uptrend may start.

Moreover, MACD is bullish. RSI is also bullish but is currently at neutral levels.

Estimated support is at 6988 followed by 6878. Expected resistance is at 7143.

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