PCCI Newsletter - July 27

The PSEi surged higher yesterday tracking most regional markets boosted by a rally in commodities, the upward momentum from European and U.S. markets from the previous night, and renewed confidence in global economic growth. After reaching a near one-year high in intra-day trading, the benchmark index settled at 8,037.51, adding 65.79 points. Most sectoral indices leaped back into the green led bythe Mining-Oil sector soaring by 131.41 points (+1.02%) followed by the Property and Holdings sectors climbing by 63.94 points (+1.68%) and 60.49 points respectively. The Industrials sector losing by 35.27 points remained the only sectoral loser. MEG, jumping by 5.51% headed the index-related gainersfollowed by LTG and SMPH rising by 3.28% and 1.76% respectively. SMC, falling by 1.56% paced the index-related losers followed by URC slipping by 1.24% and GLO. Value turnover strengthened by 31.3% to P8.17 billion inclusive of 10 block transactions. Foreigners were net buyers for the 78th in 141 trading days of the year in the regular market. The net buying position increased to P20.91 billion.

For index-related stocks, the net buying position also grew further to P15.48 billion.
The PSEi advanced sharply yesterday. It rose above the 1st minor fan line and is still above the 1st major fan line. The previous 5 and the January 2016 price gaps are still unfilled. It remains above both its 5-day and its 10-day moving averages whose bullish crossover is intact. It continues to be above its 40-day moving average. Both Its stochastics and the RSI are inside its trading zones and are bullish for the near-term. Most of the trending and volume oscillators are bullish for the short-term. A continuation of the rise is likely. The immediate resistances are now seen at 8,100 and 8,150. Another minor correction or a consolidation cannot be discounted. The immediate supports are seen at 7,900 and 7,800.

U.S. stocks ended higher last night following the Fed’s expected decision to hold rates steady given low inflation, upbeat new home sales data, better-than-estimated earnings reports from industry
heavyweights such as Boeing, AT&T and Facebook, and the rally of crude prices. The DJIA added
another 97.58 points to end at 21,711.01. The S&P 500 inched up by 0.70 point, closing at 2,477.83.
The U.S. dollar depreciated. U.S. treasury yields declined. Spot commodity prices were generally higher again. Gold climbed to 1,260.53/oz. Copper rose again to 2.8720/lb. LME nickel was higher anew at 9,915/tonne. Crude prices extended its gains. WTI leaped by another 1.80% to 48.75/bbl. Brent jumped by another 1.53% to 50.97/bbl. Most European bourses continued its modest winning streak. Vietnam continued to lead the gains of most markets in the region. Most of the regional currencies depreciated again however. Regional markets and local equities might be mixed to bullish again today behind the global rally continuing to be pushed higher by surging crude prices, and confidence on global economic growth sparked recently by upbeat global earnings reports. Profit-taking following yesterday’s sharp uptrend can however drag down the local market or limit any upward momentum.

PCCI SECURITIES BROKERS CORPORATION
Trading Participant: Philippine Stock Exchange Member:
Securities & Investor’s Protection Fund, Inc.

PSEi PER: 18.25X (2017F)
PBV: 2.19X (2017F)
Div. Yld: 1.41% (2017)
(2016F) (2016F)

The peso depreciated to finish at P50.640 versus the dollar yesterday. The weighted average rose sharply however to P50.586 with total value turnover increasing again to USD932.000 million.

Most of the benchmark treasury yields advanced as investors sold GS to take profit price-wise while re- balancing their portfolios ahead of the results of the 2-day Fed policy meeting.