15 Reasons why Philippine Stocks are Down, part 2

By Randell Tiongson on June 5th, 2013

Stock Market DownStock Market blood bath… what happened? My colleague and friend Marvin Germo wrote 15 reasons why. He posted the first 5 reasons in his blog, click HERE.

Here are the next 5 reasons.

6. Technicals, our market broke 3 support levels including a very strong 100 day moving average. The breakdown portrays a strong level of selling strong enough to overwhelm all the buyers in the market at a certain time. The breakdown points that the next possible support level could be the 200 day moving average around the 6,000 – 6,100 area.

7. Massive Foreign Selling, as great there have been a sudden surge of Filipino investors as of late, a large amount of our market is still dominated by “hot money.” Foreign money that could easily be pulled out anytime, like what we are experiencing now as foreigners continue to sell down and take profit.

8. GDP Announcement, this is a classic “sell on news” move that investors pulled off! I personally believe that regardless of what the GDP announcement was, either good or bad people who have sold and would have used the GDP as a trigger for selling. Also our economy follows and trails the market by 9-12 months, meaning 7.8% gained by the market has already been factored in and is expected.

9. Panic Selling, most investors that bought at 7,300 ++ sold and cut losses after the market dropped below 7,000. As panic is a greater motivator than excited optimism, it’s easier for stocks to accelerate downward than for it to push upward.

10. Expensive Market, a lot of foreign fund managers regard our market as to be already expensive as compared to other markets. I may not agree with them as they don’t actually see the value of what our market has but you can’t blame them if they are there to buy cheap and sell when it gets expensive and to comeback again once things get cheap again.

Catch the next 5 reasons at www.marvingermo.com

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15 Reasons why Philippine Stocks are Down, part 2