Philippine stocks hit new record high

MANILA, Philippines—Local stocks closed at a new record-high on Tuesday but gains were pared down by profit-taking on some property, power and mining stocks.

Carving a new peak for the second day in a row, the main-share Philippine Stock Exchange index finished 18.05 points or 0.4 percent higher at 4,439.61.

The index hit as high as 4,460 in intra-day trade but pulled back as some investors succumbed to profit-taking temptation.  A technical glitch briefly disrupted trading near the end of session, prompting the PSE to extend trading until 12:20 pm from the original 12:10.

Joseph Roxas, president of local brokerage Eagle Equities Inc., said a lot of investors locked up profits in anticipation of a potential correction in the US markets.

“US markets have been rallying for many days and even Asian markets, even for those who closed positively, had seen more moderate gains,” Roxas said.

“Of course, if America is up again tonight. Those who had sold will buy again. But if it goes down, we won’t go down as much (on Wednesday) because many have sold out ahead of the correction,” Roxas said.

Wall Street was on a holiday break overnight in celebration of the US Independence Day.

Roxas said the market’s next resistance would be at 4,500 and next support at 4,420.

The day’s run-up was led by the holding firm counter which surged by 1.14 percent.  The financial, industrial and services counters were modestly up while the property and mining/oil counters traded in the red.

Paul Joseph Garcia, senior vice president at Bank of the Philippine Island asset management and trust group, said the index would likely test 4,520 to 4,550 from hereon.

“At some point, it’s not gonna run away from here,” Garcia said, noting that the market would have to digest forthcoming second quarter corporate earnings and see if the so-called ghost month in August will have an impact this year.

In Chinese tradition, the Ghost month is the period where ghosts and spirits are believed to linger in our world. During this period, which coincides during the season when many western traders are on long summer vacations, investors tend to shy away from taking aggressive positions. This 2011, the Ghost Month falls on July 31 to August 28.

But Garcia agreed that old cycles seemed to be under challenge. For instance, he noted that July was usually a lean month for local equities trading.

Value turnover on Tuesday was still heavy at P7 billion.  There were 71 advancers versus 63 decliners while 43 stocks were unchanged.

San Miguel Corp. was the day’s most actively traded stock partly in anticipation of its oil refining unit Petron Corp. offering secondary shares to the public in an upbeat market.

SMC is also widely expected to rejoin the roster of blue chips under PSEi during the next index review in September.

The index stocks that led the day’s upswing were Metrobank, EDC, ICTSI, Metro Pacific Investments, URC, PLDT, BPI and SM Investments.  Non-index stock Semirara was likewise on the rise.

On the other hand, there was profit-taking on Philex, Aboitiz Power, Meralco, Atlas and Robinsons Land.