Share prices are expected to correct this coming week after closing at record highs yet again last Friday as investors pocket gains and fund managers look for a stronger base as the year comes to a close.
The benchmark Philippine Stock Exchange index (PSEi) closed at a record 5,552.34 on Friday, up 2 percent week on week.
This was hardly unchartered territory, however, with the PSEi already having reached an intraday high of 5,579.18 on Thursday.
Much of the rally in the past few days was fueled by merger talks between the country’s biggest banks. Ayala Corp., which was up 1.37 percent on Friday over the previous day, confirmed that it was in talks on a possible merger with Lucio Tan’s Philippine National Bank (PNB), which was also up 3.37 percent.
Other banks were rumored to be making a move on PNB as well, particularly Metropolitan Bank and Trust Co. (up 2.1 percent) and Banco de Oro Unibank (up 0.29 percent). Both denied making offers to acquire PNB.
In its weekly outlook, brokerage Accord Capital said the index was nearing the low end of the firm’s full-year target of the market closing between 5,600 and 5,800.
“Although we remain optimistic that our targets will be reached, we nevertheless place caution on the table on a possible pull-back in the ensuing days or weeks upon which the next rally will jump off in the final five weeks of the year,” Accord Capital said.—Paolo G. Montecillo