‘Overheated’ PSEi cools, sheds 0.35%

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The local stock market weakened on Monday as investors dumped shares to collect gains booked during the month, in the absence of little good news to encourage investors to expand their equity holdings.

The benchmark Philippine Stock Exchange Index (PSEi) slowed by 0.35 percent or 25.53 points to close the trading day at 7,334.52, while the wider All Shares was down 0.06 percent or 2.75 points to close at 4,217.83.

Luis Limlingan, business development head at Regina Capital Development Corp., attributed the local bourse’s slowdown to its “overheating” performance during the month.

“The factor that caused the sell-off is that the market has been overheating in March, up around 9.5 percent for the month alone, [and the]lack of economic data points, which will come later in the week,” Limlinga said.


Limlingan added that the low trade volume of 1.24 billion shares on Monday was also an indication of the lack of investors’ interest.

Meanwhile, Jun Calaycay, head of research and marketing at A&A Securities Inc., said that the sell-off was a manifestation of a lack of fresh leads to lure investors to buy rather than sell shares.

“Despite Monday’s slide, the market continues to point north, both technically and in terms of the underlying fundamentals. We have had a fairly decent earnings cycle and the broad economy, though having slowed last year, remains at the very least resilient – albeit not immune – to external shocks,” Calaycay noted.

Further, he explained that although Monday’s trades may have delayed the PSEI’s march toward the 7,400-mark, unless big surprises emerge on the downside, there is enough evidence to support confidence that the level may be breached.

Total value turnover was light at P510 billion, with winners still prevailing over losers, 107 to 92, while 44 issues remained unchanged.

Most of the sub-indices ended in negative territory with mining and oil firms incurring the highest losses, losing 1.23 percent, while industrials and holdings firms moved sideways.

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