The local stock barometer slipped for the second straight year in 2016, declining by 1.6 percent as investors awaited fresh catalysts while bracing for more volatility at the start of the coming year.
On Thursday, the last trading day of the year, the Philippine Stock Exchange index lost 5.8 points or 0.09 percent to close at 6,840.64 ahead of the New Year break.
The index attempted to erase intra-day losses but yearend window-dressing did not suffice. For some, the sharp rally in the last two days provided an opportunity to pocket gains.
“It looks promising for next year, valuation is already compelling given the fact that we’re trading slightly below 15x P/E (price to earnings for 2017),” said Manny Cruz, chief strategist at Asiasec Equities Inc.
A P/E ratio of 15x means that investors are paying 15 times the kind of money they expect to make.
Cruz said the stock market might still see some selling pressure in the first quarter of 2017 as they await the policy roadmap of US president-elect Donald Trump, who will assume office by Jan. 20.
During the campaign season, Trump had talked about isolationist and protectionist policies in line with his “America first” battlecry, widely seen as unfavorable for emerging markets.
“Apart from that (Trump’s policies) biggest risk will be the rate hike of the US put pressure,” Cruz said, adding that if the US Federal Reserve would hike interest rates three times this 2017, this could lead to a depreciation of the peso to 51-52 against the US dollar. “It will be a setback for Philippine equities,” he said.
Across the region, trading was mostly sluggish, tracking the overnight slump in Wall Street. The Dow Jones industrial average fell by 111.36 points or 0.6 percent to close at 19,833.68.
“Window dressing may not have been apparent due to the flattish performance of issues, but looking at them individually, it was clear that specific issues we either bought up or sold down during the last trading day of the year,” said Luis Gerado Limlingan, managing director at Regina Capital Development.
“Adding to the somewhat lackluster trading day, pending (US) home sales fell 2.5 percent month-over-month in November. That was below the 0.5 percent gain that economists had forecast. The November reading of 107.3 is the lowest print since January with the slowdown coming amid rising mortgage rates and tight supply,” he said.
At the local market, trading sentiment was mixed, with the financial, industrial and holding firm counters ending lower. On the other hand, the services, mining/oil and property counters modestly gained.
Total value turnover for the day amounted to P6.31 billion. There were 117 advancers, 74 decliners and 50 stocks were unchanged.
The PSEi was dragged down by Aboitiz Power, which fell by 4.14 percent, and Jollibee, which slid by 3 percent.
JG Summit fell by 1.9 percent while SM Investments, Ayala Corp., BPI, Aboitiz Equity and Semirara all slipped.
In the meantime, GT Capital bucked the downswing with its 3.25-percent gain while Metro Pacific added 2.46 percent.
Ayala Land, PLDT, BDO and Metrobank all firmed up.
Outside the PSEi, notable gainers included Shakey’s which rose by 1.77 percent in relatively heavy trade.