(Bloomberg) -- Philippine stocks surged in the final minute of trading to record their biggest gain since May on speculation local investors jumped in as foreign funds pulled money for the 16th day in a row.
“It’s bargain hunting,” said Jonathan Ravelas, the Manila-based chief market strategist at BDO Unibank Inc., the nation’s biggest lender. “Just like what we’ve been seeing in the past weeks: local funds have been buying while overseas investors are selling.”
The Philippine Stock Exchange Index closed up 2.2 percent, with almost three-quarters of that increase coming in the last minute of trading. The gauge has fallen 4.9 percent since this year’s closing high on July 21, paring its 2016 advance to 11 percent. Overseas investors have sold a net $457 million in a run of daily outflows that’s the longest since 2009.
Philippine stocks have been retreating on expensive valuations, the prospect of higher U.S. interest rates and as President Rodrigo Duterte’s anti-drug campaign that’s left thousands dead has raised questions about the rule of law in the country. That’s taken the shine of a market that had been a favorite with foreign investors due to one of the highest economic growth rates in Asia.
“What’s good or positive with what’s happening is that there’s enough local interest and liquidity to absorb what foreigners have been selling," said Gus Cosio, president of First Metro Asset Management Inc. in Manila. “The extra-judicial killing is disturbing and dangerous and, understandably, investors will look at it negatively.”
SM Investments Corp. provided the biggest boost to the index on Thursday, rising 3.2 percent, while Petron Corp. surged 5.4 percent. Cosio said he was taking advantage of the recent declines by buying large-cap companies including Ayala Land Inc., SM Prime Holdings Inc., Century Pacific Food Inc. and D&L Industries Inc.