Bargain hunting lifts stocks as Iran war continues

Philippine shares rebounded on Tuesday as investors picked up cheap names following a three-day slump and amid news of government efforts to reduce war-related oil trade disruptions.

The benchmark Philippine Stock Exchange index (PSEi) rose by 1.35% or 79.45 points to close at 5,948.94, while the broader all shares index went up by 1.15% or 38.07 points to end at 3,333.92.

“The market witnessed a strong rebound, bucking the regional slide despite intensifying conflict within the Middle East,” AP Securities, Inc. said in a market note.

“The local market rose upon news that the government is planning to pursue talks with Iran for safe passage of Philippine-bound vessels through the Strait of Hormuz. The news caused investors to hunt for bargains,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

President Ferdinand R. Marcos, Jr. has instructed Foreign Affairs Secretary Maria Theresa P. Lazaro to begin discussions with Iran’s ambassador to the Philippines to secure safe passage for Philippine-bound vessels through the Strait of Hormuz, Palace Press Officer Clarissa A. Castro told a briefing on Tuesday.

The Strait of Hormuz, which carries about a fifth of the world’s oil shipments, has been shut due to an Iranian blockade as its war with the United States and Israel rages on, compounding supply pressures.

The Philippines is a net importer of oil and relies heavily on Middle East crude, which accounts for roughly 98% of its imports, making it vulnerable to global price shocks.

Iran attacked and set ablaze a fully loaded crude oil tanker off Dubai on early on Tuesday, after President Donald J. Trump warned the United States would obliterate Iran’s energy plants and oil wells if it does not open the Strait of Hormuz, Reuters reported.

The strike on the Kuwait-flagged Al-Salmi is the latest attack on merchant vessels by missiles or explosive air and sea drones in the Gulf and Strait of Hormuz since the US and Israel attacked Iran on Feb. 28. Crude oil prices briefly spiked again after the attack on the tanker, which can carry around 2 million barrels of oil worth more than $200 million at current prices.

Majority of sectoral indices closed in the green on Tuesday. Mining and oil jumped by 2.53% or 389.33 points to 15,769.45; holding firms went up by 2.49% or 112.43 points to 4,627.75; property increased by 2.29% or 44.38 points to 1,980.61; industrials climbed by 1.90% or 166.70 points to 8,916.05; and financials rose by 1.03% or 18.91 points to 1,846.35. Meanwhile, services went down by 0.43% or 11.72 points to 2,707.40.

Advancers outnumbered decliners, 124 to 79, while 62 names closed unchanged.

Value turnover went up to PHP 9.82 billion on Tuesday with 1.04 billion shares traded from the PHP 8.29 billion with 746.28 million issues that changed hands on Monday.

Net foreign selling decreased to PHP 712.33 million from PHP 1.55 billion in the previous session. — Alexandria Grace C. Magno with Reuters