The PSE Index – Aug. 5, 2011
After Thursday’s Dow Jones Industrial Average and the S&P tumbled more than 4% and the Nasdaq lost 5%, the Philippine Stock Exchange Index, PSEi, plummeted 63.98 points closing at 4,437.55, Friday, Aug. 5,2011. Market breadth was bloody with losers 151 againts 17 gainers; while 17 stocks were flat.
The most active stocks that remained on the green were Aboitiz Equity Ventures – AEV, Zeus Holdings – ZHI, and PLDT – TEL. While 300-M block shares (300,963,080) of Meralco were sold at P90/share, before the end of trading day. Meralco closed at P265, down 2.57%. At P260 or below, MER, I’d say it’s a good catch with a Target price of 295.
The Worst is Yet to Come
Now that the S&P downgraded US’ credit rating from AAA to AA+, I’m expecting another week of nose-dive across all markets around the world. An example of which was Saudi Arabia’Tadawul index plunging 350.43 points on Saturday, Aug. 6,2011.
Back on our local bourse, blue chip stocks might continue to decline, though Bangko Sentral ng Pilipinas,BSP, Deputy Governor Diwa Guinigundo said “a study commissioned by the central bank showed that international credit rating agencies have underrated the country’s sovereign ratings by about two to three notches.” –BworldOnline
Regardless of the S&P, Fitch ratings or Moody’s credit ratings given to the Philippines, Monday’s outlook will not be as pretty.
Immediate support of the PSE index is at 4,400, resistance at 4563. Hopefully, this is only for the short-term, since we still have fundamentally sound companies and the government is optimistic that we can survive the US debt downgrade impact.
My bets for Monday.
Still ZHI and BSC, miners LC/LCB and MA. Second and third liner stocks, aka bazuras might surface again since index stocks and blue chips are being battered.
Though I feel that it might be safer if you just keep out of the markets for now and wait for an upswing. But if you’re tough enough to roll with the punches then it’s your choice. You don’t want yourself to get a heart attack if you see your portfolio drop to zero right? Just kidding. 
Good luck, may God help us!
Illustration from 123rf.com
