Shares end week in the green on “window dressing”

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STOCKS rose for a second straight day on Friday in a session analysts said was characterized by “window dressing” as fund managers rebalance their portfolio on the last trading days of 2017.

The Philippine Stock Exchange Index (PSEi) ended at 8,432.31, higher by 54.03 points or 0.65%, while the all-shares index ended at 4,921.41, higher by 28.61 points or 0.59%.

“The PSEi ended positive today after Sy companies such as SM and BDO, which rose by 1.34% and 2.33% respectively, lifted the index probably due to window dressing or portfolio rebalancing as we have only a few days of trading left for 2017,” Jervin S. de Celis, equities trader at Timson Securities, Inc. said in a text message.

“The market has also been trading in a range for quite some time and may retest its all time high of 8,605.15 before year end,” he added. “Also, investors are slightly staying on the sidelines due to the long holiday vacation and lack of fresh leads in the local scene.”

Portfolio managers use “window dressing”, or that strategy where an underperforming stock or those with losses are dumped and replaced with high-flying stocks, to flatter the results of their books before presenting to clients or shareholders.

While there was positive sentiment given the approval of a key tax reform in the Philippines, as well as the tax reform package in the United States, reaction from the local financial market was muted.

“Philippine and US stocks rose on Thursday, with major indices trading near record levels, although local market action was quiet as traders look for fresh catalysts following the recent approval of the tax bill in the Philippines and in Washington,” Regina Capital Development Corp. managing director Luis A. Limlingan said in a text message.

“While the TRAIN [Tax Reform for Acceleration and Inclusion] bill has been signed by President [Rodrigo R.] Duterte, the market’s reaction to it was rather muted since many were expecting the market to at least end the year around 8,800-9,000,” Mr. de Celis said.

US markets ended positively on Thursday. S&P 500 closed at 2,684.57, higher by 0.20%; while the Dow closed at 24,782.29, higher by 0.3%.

The Nikkei ended at 22,902.76, higher by 0.16% or 36.66 points; the Hang Seng index ended at 29,578.01, higher by 0.72% or 210.95 points.

Across the sectors, all gained except industrial, which ended at 11,126.36, down by 24.98 points or 0.22%.

Financials ended at 2,158.95, higher by 18.27 points or 0.85%; holding firms at 8,588.14, higher by 79.25 points or 0.93%; services at 1,604.31, higher by 6.02 points or 0.38%; mining and oil at 11,374.96, higher by 185.12 or 1.65%; and property at 3,904.06, higher by 14.86 points or 0.38%.

Total volume traded was 839.41 million, while total value was P10.15 billion. Advancers outnumbered decliners 108 to 96, while 40 remained unchanged. — P. P. C. Marcelo