The Philippine Stock Exchange index (PSEi) hit new peaks both intraday and at the close on Wednesday after a late-session rebound from mid-afternoon losses, pushed by positive corporate earnings results and optimism on the international markets.
Having notched another intraday record of 7,862.91 points before going into a slight correction on Wednesday afternoon, the benchmark stock index finished up 0.12-percent or 9.20 points at 7,844.06 – its 17th all-time high for the year, The wider All Shares index, however, slipped 1.23 points or 0.03 percent to end at 4,546.02.
Wednesday’s peaks broke the previous intraday high of 7,854.80, touched on Feb 23, and closing high of 7,834.86 on Feb 24.
Jonathan Ravelas, BDO chief market strategist, said the market continued to be fueled by the same positive factors such as strong corporate earnings growth and a stable macroeconomic picture.
Ravelas said the slight correction in Wednesday’s trading before climbing to a new record close was due to “some profit-taking.”
Eventually, some local investors started buying to take “advantage of the low prices” as they entered a bull market.
“We were saved from a slight profit-taking at the last minute as there was pressure from the overseas markets, too. Most overseas markets were up because of [US Federal Reserve Chair Jane] Yellen’s testimony before the Senate committee. So it was harder for the index to correct today,” said Joyce Anne Ramos of AB Capital Securities Inc.
In remarks on Capitol Hill, Yellen indicated the Fed would most likely not consider raising interest rates before June.
Nisha Alicer of DA Market Securities Inc., on the other hand, said that the momentum of the market is slower now, with the “rally being more selective with decliners outpacing advancers.”
“We’ve noticed profit-taking by short term investors as some stocks hit targets or overbought indicators. They are rebalancing their portfolios,” Alicer said, noting that the recent boost has been more in the property sector on optimism about the sector’s greater focus on increasing recurring income, compensating for losses in the gaming sector on estimated weaker revenues from the Chinese declaration of an ‘all-out war’ on the global gaming industry.
“Some stocks are also undergoing MSCI rebalancing—SMPH [SM Prime Holdings Inc.] was a gainer as the stock earned increased weighting, while URC [Universal Robina Corp.] got a decrease in weighting,” she added.
Among the sectoral indices, financials, industrial and holding firms declined while services, mining and oil, and property counters were gainers.
Most active companies were URC, Puregold Price Club Inc., Jollibee Foods Corp., DMCI Holdings Inc. and Bloomberry Resorts Corp., all decliners, while Wednesday’s active gainers were Ayala Land Inc., Philippine Long Distance Telephone Company, Security Bank Corp., SMPH, and Nickel Asia Corp.
Over the next few days, Ravelas said the PSEi is likely to trade within the 7,750 to 7,900 points range on the back of the same market indicators.
Alicer said the market is expected to be robust in the long term. She recommends that investors take advantage of dips in the index after the winding-down of the earnings season.