Philippine Stocks Enter Bear Market as Foreign Outflows Surge
By Ian Sayson - Jun 25, 2013 10:51 AM GMT+0800
Philippine stocks entered a bear market as the nation’s benchmark equity index slumped for a fifth day amid the biggest monthly foreign sell-off on record.
The Philippine Stock Exchange Index (PCOMP) fell 2 percent to 5,854.13 at 10:48 a.m. in Manila. The gauge has lost 21 percent since closing at a record 7,392.20 on May 15. Overseas funds sold a net $344 million of Philippines stocks this month through yesterday, heading for the biggest monthly selloff since Bloomberg began compiling the data in 1999. Ayala Corp. (AC), owner of the nation’s largest builder and biggest bank by market value, sank to a three-month low.
Philippine stocks have slumped from a record as overseas investors sold off the nation’s equities after U.S. Federal Reserve Chairman Ben S. Bernanke said the central bank could consider paring stimulus if the country’s employment market showed sustainable improvement. Bernanke said June 19 the central bank may start reducing bond purchases and end the program in 2014 should risks to the U.S. economy abate.
“The slump was caused by expectations the U.S. will taper monetary stimulus and not by a deterioration in the Philippine economic and corporate outlook,” Jerome Gonzalez, who helps manage $230 million at Philequity Management Inc., said by phone today. “This has opened a good window to come in and start buying in tranches. Our fundamentals remain intact.”