Stocks fell on the last trading day of 2015, as global funds fled the local market amid the tightening of monetary policy in the US.
The Philippine Stock Exchange index, the 30-company benchmark, shed 31 points, or 0.5 percent, to close at 6,952.08 on Tuesday. The gauge was also down 3.9 percent since the start of the year, ending six years of gains.
Foreign investors sold $1.2 billion more shares than they bought this year, dragging the PSEi to its first loss since 2008.
The heavier index, representing all shares, also dropped 5 points, or 0.1 percent on Tuesday, to settle at 3,990.47, on a value turnover of P6.5 billion. Gainers outnumbered losers, 101 to 72, while 43 issues were unchanged.
Nine of the 20 most active stocks ended in the green, led by Travellers International Hotel Group Inc., which climbed 10.6 percent to P4.40. Cirtek Holdings Philippines Corp. gained 3 percent to P20.75, while Security Bank Corp. advanced 2.2 percent to P142. Metro Retail Stores Group Inc. added 2.1 percent to close at P3.98.
Analysts said they remained bullish on the local stock market on favorable domestic prospects. BDO Unibank Inc. chief investment strategist Jonathan Ravelas said he expected the PSEi to rise to the 8,000 level in 2016, if investors raised the premium on local stocks to more than 20x price-to-earnings ratio.
“Potentially, investors can’t discount the possibility that the local stock market could hit as high as the 9,000 level in 2017 with the assumption that the next president’s administration implements and executes well major infrastructure projects needed to further boost investments,” Ravelas said.
BPI Securities chief executive officer Michaelangelo Oyson said the PSEi could hit between 7,600 and 8,200 in 2016 on election-related spending and increased government expenditures.
The stock market started strong in 2015, with the PSEi raising the ceiling 26 times this year. It closed above the 8,000 mark for the first time on April 6, 2015 and reached a record high 8,127.48 on April 10.
Trading started to go down in the second half, after US Federal Reserve Janet Yellen signaled the starting of monetary tightening. Concerns about the weakening Chinese economy also contributed to the market’s decline.
Foreign funds that propped the local stock market over the last six years started to exit emerging markets such as the Philippines and shifted their funds back to developed markets. Over P61 billion worth of foreign funds flowed out of the Philippine stock market in 2015. Average daily value traded for the year stood at nearly P9 billion.
Meanwhile, Asian stock markets broadly rose Tuesday in see-saw trading despite fears about the state of China’s economy, a key driver of global growth.
Another slump in oil prices also curbed investors’ enthusiasm in low-volume trading as markets wind down in the last week of the year.
Analysts warned that sliding crude prices, which had enjoyed a brief push upward last week, would drag on Asia-Pacific markets.
“Whenever the weakness in oil regains market attention, it weighs on sentiment,” Toshihiko Matsuno, chief strategist at SMBC Friend Securities in Tokyo, told Bloomberg News.
“Movement in Chinese shares will continue to have an effect on other markets.” With Bloomberg