Profit-taking expected this week
AFP photo
MANILA, Philippines—The stock market is expected to soften this week as more investors may be tempted to pocket gains after the index reached new heights.
Last week, the main-share Philippine Stock Exchange index rose by 128.5 points, or 2.49 percent, to 5,297.55. It also set a new intraday high of 5,329.76 last Friday before pulling back.
The market may encounter some profit-taking this week as current high valuation may discourage investors to come in, said AB Capital Securities.
“Buying interest still looks strong, but selling pressure at lofty prices is equally strong,” the brokerage said, adding that the market was trading at 18.9 times the money made in 2011.
“The main index is also slightly above our fair value estimate of 5,200,” the brokerage said, noting that a lot would depend on corporate earnings to be released this week.
Across the globe, financial markets were also cautious ahead of the elections in France and Greece this week. On Friday, the Dow Jones Industrial index slipped by 168.32 points or 1.27 percent.
Freya May Natividad, an analyst at F. Yap Securities, said investors should be increasingly selective.
“Investors will continue to trail the release of first quarter earnings, especially with large-cap PLDT (13.6 percent weight to overall PSEi basket) & ALI’s (6.58 percent) upcoming briefing, among others,” Natividad said.—Doris C. Dumlao
