The ‘phenomenon’ is back. The (stock market) ghost month begins.
The benchmark Philippine Stock Exchange index (PSEi) dived 149.34 points, or 1.86 percent to 7,888.44 from previous day’s 8,037.78 finish on Wednesday.
Almost all counters suffered a massive decline, led by services and holding firms that plunged 2.85 percent and 2.55 percent, respectively.
Value turnover was thick at P13.55 billion as 2.07 billion shares changed hands. Decliners swamped advancers, 163 to 37, while 41 issues unchanged.
Telecom giant Philippine Long Distance Telephone Company (PLDT) booked a 33-percent decline in profit to P6.2 billion during the second quarter, weighed down by investment losses and higher spending. PLDT comprises bulk of the PSE main board.
“Profit-taking extended Wednesday following PLDT’s first-half income report on Tuesday. Investors took it as an excuse to capitalize on their gains from the rally,” said Jonathan Ravelas, chief strategist at BDO Unibank.
The so-called ghost month, which starts on Aug. 3 and ends on Aug. 31 this year, is a phenomenon of low liquidity and volume. Many investments in new ventures and stocks are put-off for later dates.
For her part, Mary Jaimielyn Mabute, investment analyst at F. Yap Securities Inc., attributed the market’s slump to fears among investors that the Bank of Japan would eventually reduce its government bond buying program.
Citing the MarketWatch, Mabute said the latest monetary policy meeting minutes showed growing tensions over the central bank’s highly accommodative policies and its diminishing returns.
“As the ghost month (starts), a lot of Chinese traders are starting to sell off and close their positions… A lot of blue chips are going down because of their weak earnings reports, a lot of investors (thus trade) second and third liner (stocks),” said Victor Felix, equity analyst at AB Capital Securities. (with report from Leslie D. Venzon)