August 1, 2001

Whatta Drop

A broad-based selling spree, led by a number of index heavyweights brought about a 29.18-point decline in the Phisix. We earlier reported that we see the index testing the 1300 psychological barrier soon, or perhaps even the 1288 level where a gap has yet to be covered, although we did not expect the intense selling pressure experienced by the market today.

Most of the credit should go to TEL, as it lost P45 and closed at P630, its intraday low. This level is already an acceptable buying level, although it may even hit P600, perhaps by tomorrow. The issue's nearest low was at P610, registered in early June. Before that, the last time TEL reached this low was in 1995. There are fears that TEL may again report below-par earnings as it did last year.

SMPH was also one of the major losers for the day, slipping 4.76% to P6. We suggest watching the issue as it nears oversold levels.

Combined foreign selling for the two issues reached P43mn, compared to the rest of the market which netted a net foreign selling figure of P36mn.

In marked contrast to the rest of the market, MFC reached another all time high, gaining a hefty P75 to P1585. SLC however is fast on its heels, rising by P10 today and closing just a shade lower than its all-time high of P1335.

AC finally reached P6, covering the gap at the same level. Oversold for over a week now, the issue could prove to be one of the leaders should the index wage a technical bounce at the end of the week. Buy.

MER lost a peso today, in line with the broad market's movements. The decline caused the issue to drop to an 8-year low.

MERB on the other hand lost P2 and is fast approaching attractive buying levels. We recommend buying the issue at P40 or lower.

LTDI, which has a short-term cap at P30, didn't get the chance to test it as the issue was weighed down by the gloom of the rest of the market. Furthermore, the company likewise reported disappointing results for the half.