Philippine shares peaked at a new intraday record but finished with pared gains as profit-takers dominated trading, taking their cue from Wall Street’s decline overnight.
After hitting 7,807.71 points earlier in the day, the Philippine Stock Exchange index (PSEi) drifted to close 0.76 percent or 59.43 points lower at 7,723.14. The wider All Shares index slipped 0.57 percent or 25.69 points to settle at 4,485.54.
“The drop in the (local) market was mainly because it followed the US markets. Investors also took this opportunity to take profits given that the market just reached an all-time high intraday,” Lexter Azurin, research head at Unicapital Securities Inc., said.
Nisha Alicer, an analyst at DA Market Securities Inc., said the main stock index pushed past 7,800 points on the back of the market’s “strong momentum as earnings trickled in,” but was later dragged down by Metro Pacific Investments Corp.’s (MPIC) losses after a discounted top-up shares placement overnight, and with Universal Robina Corp. (URC) “taking a breather” after posting a new high on Monday.
The main PSEi was supported in earlier trade by the upward revision of JPMorgan’s forecast for the Philippine economy—raising its estimate of gross domestic product (GDP) growth to 6.4 percent from a previous forecast of 5.4 percent on expectations that the central bank would cut its SDA rates by 25 basis points in the second semester of the year, Alicer said.
“This week, we are positively biased, especially if (the fund) flows ramp up due to an expected increase in the MSCI weightings [index rebalancing]to be announced tomorrow,” Alicer said. She noted that the year is good for the market given “lower oil dividends” and with “inflation (estimated) to remain low.”
Azurin, however, doubted inflation would stay low given the oil factor, saying it “may be higher in the next few months given the increase in prices in February.”
“Thursday’s meeting [of the Bangko Sentral ng Pilipinas is]expected to keep (the key) rates unchanged despite the drop in inflation,” Azurin said. “However, inflation will probably be higher in the next few months given the increase in prices in February. But the expectation is that the BSP will keep the rates unchanged.”
“The local market will continue to follow the US markets. In the meantime, the price movement [in PSEi]in the next few weeks will be driven by the release of corporate earnings,” he added.
The services index rose 0.35 percent despite the losses posted by the rest of the subindices, led by a 1.8 percent drop in mining and oil.
Among the actively traded stocks, URC, MPIC and Energy Development Corp. fell at the close. The active gainers included the Philippine Long Distance Telephone Company, Bloomberry Resorts Corp., BDO Unibank Inc., GT Capital Holdings Inc., Aboitiz Equity Ventures Inc. and Robinsons Retail Holdings Inc.
Losers outnumbered gainers, 97 to 90, while 48 issues finished unchanged. Total volume was 3.45 billion shares, valued at P19.14 billion.
On Monday, the PSEi recorded its 10th all-time closing high this year and intraday record of 7,782.57, up 0.70 percent or 54.39 points on the day. The broader All Shares index gained 0.32 percent or 14.49 points to 4,511.23.