Market snaps 3-day climb as investors take profits

The stock market retreated yesterday, snapping a three-day climb as investors took profits on the recent sustained gains ahead of the weekend, dealers said.

They said most stocks have become expensive following the market’s recent rally which drove the main index to its highest level in eight months.

The Philippine Stock Exchange composite index fell 6.46 points to 2,092.68 after trading between 2,085.76 and 2,099.14. Volume was 785 million shares worth P1.168 billion.

The broader all-shares index retreated 3.30 points to 1,265.47.

Losers led gainers 38 to 36, with 44 stocks unchanged.

"The rise has been too sharp so it was inevitable investors would want to cash in," said Mark Alan Canizares of Citiseconline.com.

Dealers noted that prices are at heavily overbought levels and need to correct to pave the way for another rally.

The stock market has been rallying since Nov. 1 after the government finally implemented a long-delayed expanded value-added tax (VAT) which economists say will forestall a looming fiscal crisis.

Bank of the Philippine Islands fell P2 to P59.

San Miguel Corp. B shares, available to local and foreign investors, advanced 50 centavos to P90. San Miguel Corp. A shares, limited to local investors, ended unchanged at P65.

"This is just a temporary retreat," said Jonathan Ravelas, strategist at Manila-based lender Banco de Oro and who has a ‘buy’ rating on Philippine Long Distance. "It is a good opportunity to come in for those who missed the recent rally.’’

Market sentiment has been lifted in part by the government’s implementation on Nov. 1 of new value added taxes on energy and fuel, a move which will boost revenue and cut state debt.

Philippine Long Distance Telephone Co. (PLDT), the nation’s largest phone company, fell P20, or 1.1 percent, to 1,815 after hitting a record P1,835 yesterday. The company this week reported third-quarter profit before one-off items grew a better-than-expected 24 percent.

ABS-CBN fell 50 centavos, or 3.2 percent, to P15, paring this week’s gain to 3.5 percent. The company said yesterday after trading closed that third-quarter profit dropped 8.9 percent to P159 million.

Limiting declines, Ayala Land Inc., the nation’s largest property developer, rose 20 centavos, or 2.1 percent, to P9.70, bringing this week’s gain to nine percent.

The company said yesterday its third quarter-profit rose 15 percent to P789 million on higher earnings from shopping malls and residential sales.

Shares worth P1.19 billion were traded, four percent higher than the six-month daily average. – AFP