Friday's closing as of Sept 7, 2018 have continued the selling pressure for the PSEI with the Philippine Peso -PHP value losing more ground as the USDPHP exchange rate accelerates to the 53.98 high to close at 53.71; on top of the regional performance among its Emerging Markets - EM CCY peers in Asia FX trading.
As of Sept 7, 2018
Philippine Peso
PSEI marked a low at 7526 & close with a pullback at 7599 from market capitulation / short-squeeze as investor / traders don't want to hold positions over the weekends. This is why we emphasize when intervention occurs in the AM opening, and the PM closing leaves retail investors & traders at the hands of institutional players. But not everyone is paying close attention to this market play which happens more often as a matter of exchange policy. With Reference to PH Stocks Mix Readings / Distinct Trade setup & Divergent Trend Direction However the case maybe most major banks could still be able to do this strategy of hedging as part of the banks clients who has international exchange rate exposure from loans. investments and debt financing that would be susceptible to foreign exchange adverse price fluctuations and in need of protection. But at the same time, be cautious of those speculative movements being taken advantage of. Although, this process is not limited to banks & other institutions alone. As high net worth individuals and private companies who holds US Dollar denominated transactions and holdings would be able to do the same for as long as they have access to these markets.
PSEI marked a low at 7526 & close with a pullback at 7599 from market capitulation / short-squeeze as investor / traders don't want to hold positions over the weekends. This is why we emphasize when intervention occurs in the AM opening, and the PM closing leaves retail investors & traders at the hands of institutional players. But not everyone is paying close attention to this market play which happens more often as a matter of exchange policy. With Reference to PH Stocks Mix Readings / Distinct Trade setup & Divergent Trend Direction However the case maybe most major banks could still be able to do this strategy of hedging as part of the banks clients who has international exchange rate exposure from loans. investments and debt financing that would be susceptible to foreign exchange adverse price fluctuations and in need of protection. But at the same time, be cautious of those speculative movements being taken advantage of. Although, this process is not limited to banks & other institutions alone. As high net worth individuals and private companies who holds US Dollar denominated transactions and holdings would be able to do the same for as long as they have access to these markets.
On the flip side, these process should likewise been done with the PSE as the SEC has already approved the Short-Selling program since June 5th of this year. Thus providing retail investors & traders a decent level playing field for declining prices as well. But the next move is 'Implementation'. With similar non action from the REITs which should open up more trading and investing activities for both local and foreign investors.
ReplyDeleteThat's why in comparison with the GULF States, Saudi Arabia, UAE, ABU DHABI has taken the lead with Foreign direct investments inflows which have poured into their respective economies. And now Kuwait is coming into the picture with their own liberalize policies that would also expects foreign investment inflows to increase as most of these Gulf states would be listed under the Emerging markets category.
This is how global trading standards should be and provide a broader perspective investments where the interest of investors do come first. A sound investment infrastructure can only do well for each country's economy and for society.
ReplyDelete#Trade figures on #account #deficit would widen and further put pressure on the #PHP on top of the higher #inflation numbers recently posted.
ReplyDeleteAdditional US #tariff if not properly address can still be the jittery factor among Asian market #investors particularly the Philippines with increasing #consumer #prices already felt across the country.
As mentioned, it really takes well within and about a month & half to see the true price direction after the fact a market call could be validated. From the 1st mix reading the PSEI have reflected that the divergent trend between certain individual stock relative to the PSEI as an indicator.
ReplyDeleteAlong side the three major companies have shown that the results beleaguering the PH stocks market have continued and now validated. However, the continuing negative sentiments on inflation, trade deficit, trade war jitters and the PH Peso depreciation have been the fundamental drivers of the resumption of a major decline until such time at least two of the main catalyst can be address with certain steps taken.
Finally the USDPHP exchange rate have hit the 54.10 level the weakest value in nearly 13 years. This has been expected in spite of the recent appreciation towards the 53.70 as indicated in the above chart. For now narratives on the exchange rates and its direction would not change as it has already been defined.
ReplyDeleteNarratives on the continued decline of GTCAP stocks have already reached beyond its retracement price from which it came from at 869.50, 846.50 and finally at 814.00 respectively. Where the declining lows would have already triggered market capitulation among previous long positions that held on while the stock's relative strength remained oversold.
ReplyDeleteThe PSEI previous market recovery can now be called a 'dead cat bounce' as we have made mention that diagonal uphill climb towards the 7880/81 levels would not be a full recovery. The remerging US - China trade war spat, foreign investment outflows other than inflation pressures have come at terms with regional peers to do the same market reaction. Currently PSEI is below 7300 levels.
Thus seeing quite a number of investors exit on risk aversion and market capitulation. Besides, no amount of PH retail investors would have the real ability to pick the slack of Foreign outflows as earlier indicated by some analyst with a lot of investors moving away from being dependent to foreign liquidity that FDI brings to the table.
Overall with FDI outflow from EMs and the repatriation of USD back to the US makes more sense now especially with a resurging 10 Year Treasury yield back above 3.00 and the continuing Asian currency depreciation makes a wiser decision for foreign investors.
ReplyDeleteThe theme of DIVERGENCE between US Equities and Emerging Markets have been the highlight on top of the PH stock markets decline which has now been overdone with institutional pushing the numbers to the extent where retail investors in the red are more than willing to throw-in towel which corporate buy backs are likewise taking this advantage to buy more from their own shares. Meantime, there are only a couple of major companies we have identified that have applied the very same strategies to counter the flow of negative sentiments while staying above waters.
Let's closely monitor how some of the better known broker / corporate analyst would move in the market stating that the current levels are a 'NO BRAINER' to go long contrary to the fact that they already have called the 7500 a buy signal.
As of Sept 19, 2018
ReplyDeletePH Stock Market Case Scenario based on real Facts & Data
A Decision where Investors should make a stand!
The PHP exchange rate is relatively down against the USD as much as -13.63% for the past 3 years. While on a YOY basis it is -5.46% compared to a YTD at -7.23%. Now with inflation at 6.4% from the recently released data and the PH Stock market index at 7221.23 equivalent to a -15.62% YTD level decline, nearing the -18.12% loss when the PSEI was down to 6929/86 last June 25, 2018.
How much do you think should the market recover to for retail investors to make a decent return for the equity investments? Meanwhile investors / traders still have to pay an adjusted tax increase for every trade done!
Although, these figures may be pessimistic; being optimistic there is still a probability of a turn around once the numbers that we are expecting the market to mark by the 4th quarter entry be reflected. But until such data and figures shows we would not want to speculate on a full turn around unless certain narratives changes that would provide the major catalyst to turn the PH market higher without resorting to window dressing for clients benefit as a show & tell.
To find out where and how should we make a stand...Come & Join us from our 'Relative Series of Progressive Sessions' at the Coffee Project EVIA. Click on the link above to sign up!