MSCI August QIR 2014: Effect on Total Turnover Value of the Philippine Market

I didn't monitor much of foreign fund flows until now.  The Philippine market being relatively small and illiquid can easily be swayed by the entrance and exit of foreign money.  Regardless of companies having solid fundamentals and being undervalued, if foreign investors decided to get out of our market, surely stock prices will be pulled down by the large selling of these monstrous funds.

"MSCI Rebalancing" has already been a buzzword with local investors.  Certain stocks move as based on the increase/decrease of its weight, more so with the case of inclusion/exclusion as a constituent of an MSCI index.

The announcement (w/c includes the list of concerned stocks) has been announced early August; however, the actual Rebalancing happened on August 29.  Take a look on the Total Turnover Value of the Philippine market during that time.

Philippine Market Activity
c/o www.investagrams.com

More importantly, it is good to note that Foreign buying is still dominant, which means market rise as shown through the PSE index is still being supported at this point.