The market confirmed the perceived correction today. The market closed in the red at 7864.70, down by 148.72 points or 1.86 percent. The broader all share index is down by 1.53 percent.
Most of the sub-indices for the day are down with the exception of the Financial sector after being beaten down for a couple of days. The worst performing sector is the Property sector dropping by 4.49 percent. The second worst performing sector is the Holdings sector falling by 1.80 percent.
Within the Property sector, SMPH led the sub-index lower as it closed at 37.00, which was lower by 6.92 percent versus yesterday’s close. ALI closed at 43.10, lower by 4.22 percent. RLC closed at 22.5.00, lower by 1.32 percent. MEG closed at 5.13, lower by 0.39 percent.
Within the Holdings sector, AC led the sub-index lower as it closed at 919.00, which was lower by 5.31 percent versus yesterday’s close. SM closed at 960, lower by 2.04 percent. JGS closed at 65.00, lower by 1.37 percent. DMC closed at 12.40, lower by 1.59 percent.
Which Stocks Traded the Largest Volume?
The most active stocks today include AC with PHP 1.99 billion in traded value. SMPH also made it to the top gainers’ list with a traded value of PHP 1.63 billion. ALI also had PHP 514.28 million in traded value.
Gainers and Losers for the Day
Significant gainers include PHA, higher by 9.09 percent, PHR by 8.63 percent, NRCP by 5.00 percent, and ECP by 4.22 percent.
Significant losers include SMPH by 6.92 percent, ABA by 5.48 percent, AC by 5.31 and TUGS by 4.97 percent.
There were 64 advances, 127 declines, while 50 names remain unchanged. Value turnover totaled PHP 8.09 billion. Foreign exchange rate stood at USD 1:PHP 52.03.
Banks Downsize Hanjin risk
Banks released bank disclosures to reassure the public of their risk exposure to Hanjin Heavy Industries and Construction Philippines, Inc (HHIC-Phil). Collectively, they are confident that this will not shake the financial sector.
Hanjin has already received the go signal for the rehabilitation proceedings to commence from the Olongapo City court. The total exposure of the four banks is at USD 412 million.
RCBC has an exposure of USD 145 million, which is also the biggest among the four banks. The bank currently has PHP 614 billion in assets and PHP 387 billion in net loans. The bank has a non-performing loan ratio of 1.2 percent as of September 2018 and will most likely increase this figure after factoring in Hanjins default. However, it assured the public that its PHP 84 billion capital is enough to absorb the losses. The bank also has a strong capital adequacy ratio of 17.3 percent as of September 2018.
BDO’s exposure is at USD 60 million which only compose 0.15 percent of its loan portfolio. This is seen to have no material effect in the bank’s financial condition.
BPI on the other hand has a USD 52 million exposure and not USD 60 million as previously announced which only accounts 0.20 percent of its loan portfolio.
Fitch Solutions, a sister company of the ratings agency Fitch, said that the Hanjin issue is not a systemic risk for the banking industry even if it was the biggest financial scandal in Philippine history. It expects however, that it will be a challenging environment moving forward.
Labor Secretary Silvestre Bello also assured that the remaining 3,800 workers of HHIC will receive their separation benefits. The department will also provide re-employment to the displaced workers and has set up meetings with other government agencies who may need their skills.
A possible correction
The index corrected today after the registered doji yesterday. The medium term trend however is still bullish with the 15 EMA and 20 SMA as immediate support. The bullish trendline has not been broken yet. MACD is moving sideways after trending bullishly. RSI has gone down to neutral levels from overbought levels. Support is estimated is between 7636-7681. Resistance is expected at 7889 followed by 8024.