INQUIRER FILE PHOTO
As the local stock market reopens after a one-day break to celebrate Ninoy Aquino day, brokers are expected to hedge ahead of a long weekend break amid steep stock valuations and will be trading with caution.
Before the holiday, stocks closed higher for three straight sessions. On Wednesday, the Philippine Stock Exchange index gained 13.74 points, or 0.19 percent, to close at 7,096.49.
“I think the market is riding on the euphoria brought about by easing geopolitical tension, which has created a risk-on mood,” said Jonathan Ravelas of Banco de Oro Unibank. “At the same time, the first half earnings results validate the present prices, encouraging investors to stay invested. However, there are lingering risks, and … investors are taking advantage of the rallies to lighten their position.”
As the recent rally was mostly influenced by MSCI adjustments which raised risk weights on large-cap stocks, Ravelas said once adjustments by index-tracking funds had been done, the euphoria would likely wane. Doris C. Dumlao