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By Jed Jaleco Del Rosario
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THE Philippine stock market closed on a bearish note this week when it declined below 7,000 points. Hernan Segovia of Summit Securities says that the decline was led by PLDT, which suffered from foreign selling. However, stocks from all the various sectors also experienced declines.
“The market is back to where it was at the start of the year,” Segovia said, stating that the drop below 7,000 points is part of much longer trend that started earlier this year when the Philippine stock market reached resistance at around 8,000 points.
Despite the bad news, Segovia warns investors not to jump to any quick conclusions. He believes that this week’s decline was not necessarily due to the US election or any weakness in the economy.
One alternative explanation is that the decline was caused by foreign investors transferring their assets from equities to the commodities market, which is now in the process of recovery. Another possibility is that foreign investors are transferring their assets from the Philippines stock market and moving them back to the US or another Asian country.
Segovia also holds out hope that the stock market will recover next month, and climb back up beyond 7,000 points./PN
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