The Philippine Stock Market capped a three-day decline by posting its biggest loss in four months.
On Wednesday, the Philippine Stock Exchange Index fell back through the 8,000 level it had recently blown past for the first time, tumbling 1.86% to 7, 906.46. Decliners outnumbers advancers 158 to 41. The index had climbed 9.3% this year after the government said the economy would grow as consumers spent the money they saved from falling oil prices.
The Manila Bulletin quoted brokerage 2TradeAsia saying that the rise in crude oil had caused investors to trim their exposure to retail and consumer shares.
Bloomberg blamed the decline on foreign investors who have sold $43.85 million worth of Philippine equities the past four days, the longest series of outflows since December. Many have seen the break through the psychologically important 8,000 level as a sign of frothiness and more of a reason to sell than buy more.
However, Asia Hedge considers this overthinking it too much. At Tuesday’s close, year-to-date the Shanghai Composite was up 27%, while the Shenzhen Stock Exchange has rocketed 55%. With the Chinese stocks markets surging, and China the main growth engine in the Asia-Pacific region, why stay in Manila?