Index eases as market takes breather after recent rally

Share prices closed 0.26 percent lower yesterday as profit-taking set in after the market hit fresh 10-year-highs, dealers said.

The Philippine Stock Exchange composite index fell 7.96 points to 3,012.74 after trading between 3,018.07 and 2,977.97.

The broader all-share index slipped 5.26 points to 1,872.24.

Losers outnumbered gainers 59 to 38, while 62 stocks ended unchanged. Volume turnover was 2.9 billion shares worth P4.8 billion.

"The market is taking a breather after the recent rally," said Astro del Castillo of First Grade Holdings Inc. "A healthy pullback can be expected as the market again starts consolidating."

They said it would not be difficult for the market to regain its upward momentum in the near term given rosy economic prospects.

"The fundamentals are picking up. The government is keeping a tight rein on its deficit, there is foreign capital coming in, the peso is gaining strength, while the inflation rate is benign and the central bank is expected to cut its key rates in the next policy meeting," Del Castillo said.

Some analysts, however, said the market will likely remain volatile in the coming weeks.

"The market could be seesawing in the coming sessions with no fresh news to guide investors," said Ron Rodrigo of Unicapital Securities said, noting that profit taking could set in soon.

Philippine Long Distance Telephone Co. (PLDT) paced the decliners, dropping as much as P60 in mid-trade. It capped its losses in late trading, shedding P35 to close at P2,545.

Food and beverage conglomerate San Miguel Corp.’s A-shares, retreated P1 to P65, while its B-shares dropped 50 centavos to P76.

Ayala Corp., the country’s third-largest by market value, declined P15, or 2.6 percent, to P565. The stock’s 14-day relative strength index, a ratio made up of changes in its share price in the past two weeks, was at P73 at the start of yesterday’s trading. A figure above 70 signals to some investors that the stock is poised to fall.

PNOC Energy, which runs the world’s biggest wet steamfield facility, plunged 15 centavos, or 3.2 percent, to P4.60. The stock has lost 5.2 percent since Jan. 2, when the geothermal producer said the restoration work at one of the plants it supplies fuel to was delayed.

"Investors were looking for a reason to sell and they found a convenient excuse,’’ said Rico Gomez, who helps manage about $1 billion at Rizal Commercial Banking Corp. in Manila. "Expectations are its earnings will take a hit."

The damage may be equivalent to seven percent to nine percent of the company’s earnings, Gomez said. – AFP