PSEi drops below 8,000 as traders abandon ‘basura stocks’

ILOILO City – The Philippine Stock Exchange index (PSEi) ended last week at just below 8,000 level, a serious blow to the expectations of many traders and investors.

According to stock broker and technical analyst, Hernan Segovia, the drop in the index was partially caused by the selloff of various “basura stocks,” high risk speculative stocks with little value.

Segovia said that “basura season” is now over, and with it, the market has quieted down, as retail traders and investors shifted their portfolios away from speculative stocks.

“The sentiment have shifted from positive to quite neutral right now, because retail power, buying power have diminished right now,” Segovia said. “So the market is quite dull and a bit biased to down.”

Despite this, Segovia said that he believes that the market is still healthy, provided that it doesn’t drop any further.

“We still consider it healthy because the trend is still up,” Segovia said, “And for that, we are keeping our bullish tone for the first quarter. However, given any change in events, fundamentally or sentiment, we need the index to close the first quarter at 8,000. At least.”/PN


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