Philippine stocks slide on profit taking

MANILA, Philippines—The local stock index dipped on Thursday as investors pocketed gains after the previous day’s surge to a new all-time high.

The Philippine Stock Exchange index gave up 19.21 points, or 0.38 percent, to close at 5,031.78. The index was relatively firmer in morning trade but succumbed to greater profit-taking in the afternoon. Only the counter for banks and conglomerates advanced for the session.

The property and mining/oil sub-indices were the most battered counters, respectively declining by 1.79 percent and 1.85 percent for the day.

“The blue chip issues like Meralco and ALI are most ripe for profit-taking. Funds are shifting towards second liners with growth stories,” said Manny Cruz, chief strategist at Asiasec Equities.

Cruz said the market would likely move sideways through next week between a range of 4,900 and 5,070, the all-time intraday high that was hit on Wednesday.

Asked whether the recent data on remittances had anything to do with the market’s decline in afternoon trade, Cruz said the 5 percent remittance growth for January, although slower than the growth in the month ago, was still in line with government expectations.

British banking giant HSBC also shrugged off concerns on remittance growth, which grew at a much slower pace compared to the 6.2 percent in 2010. Sequentially, remittances declined 1.9 percent month on month seasonally adjusted in January in comparison to a 2.9 percent monthly contraction in December.

“Overseas Filipino workers sent less money home in January due to challenging conditions in host countries. While remittance growth has decelerated recently, it is still robust and will continue to be a major driver of private consumption in the Philippines,” HSBC economist Trinh Nguyen said.

Value turnover amounted to P8 billion. There were 62 advancers, which were overwhelmed by 116 decliners while 33 stocks were unchanged.

Although investors are generally upbeat on local equities, valuations are becoming a concern. On Wednesday, the index hit a record intraday high of 5,070.20 and also closed at a new all-time high of 5,050.99.

The PSEi was weighed down most by Megaworld, PLDT, RLC, Meralco, AP, BPI and SM Investments. Petron also closed lower.

On the other hand, AGI, MPI, Metrobank, DMCI, AEV, EDC, JG Summit and ICTSI curbed the PSEi’s decline. On the other hand, Security Bank and PNB also aided the financial counter.