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MANILA - (UPDATED 4:21 p.m.) Stocks slipped on Wednesday as investors took their profits a day after the Philippine Stock Exchange index climbed to a new record.
The composite index gave up 10.98 points to 5,354.72, as losers beat gainers 94 to 75. Thirty-four stocks were unchanged. About 3.2 billion shares worth P6.08 billion changed hands.
All counters were down except for holding firms, which ended the day flat.
Most active stocks were PLDT, Manila Water, Megaworld, DMCI Holdings and Metrobank.
Jun Calaycay of Accord Capital Equities Corp. said the PSEi touched an intraday record, briefly breaching the 5,400-line early in the session.
"That racked up an aggregate 256.24 points (5.02%) over the last eight days fell heavily on the collective shoulders – and spirit – of investors, sapping liquidity on the buy side. Nevertheless, despite having dropped into negative territory prior to the noon recess, prices held steady, moving practically flat and drawing interim support at the 5,350-mark," Calaycay said.
Investors were looking for reasons that the market would climb further but could not find any so profit-taking would make a more "prudent short-term stance," he said.
James Lago, head of research at PCCI Securities, said the current support level is at 5,100 with more short-term risks posed by external forces.
He said the European Central Bank is unlikely to do anything during its policy meeting on Thursday, with half of the money market traders expecting the bank to cut its main refinancing rate to a record-low of below 1 percent.
Lago expects the PSEi to end the year at 5,500 given the growth trajectory of the Philippine economy, which may be within five to six percent.
That growth rate, however, would not justify the current value of Philippine stocks, which are trading at 18 times earnings, when other markets in the region are just within the 12.3 to 12.5 range.
Lago said other Philippine stocks are trading at 20 to 24 times earnings. He added that the strategy is to pick out which are undervalued and stay away from these overvalued ones.
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