Stocks end 1.21 percent lower on continued profit-taking

Share prices closed 1.21 percent lower yesterday with investors taking profits after the market recently hit its highest level in nearly a decade, dealers said.

They said such a correction was to be expected and positive as it will allow investors to pocket some profits and then come back in.

The composite index fell 39.58 points at 3,232.39 after trading between 3,231.45 and 3,284.95.

The broader all-share index fell 20.89 points to 2,040.29.

Losers led gainers 68 to 41, with 61 stocks unchanged.

Volume was 3.7 billion shares worth P3.8 billion.

"The downturn is part of a healthy breather pending further revalidation of growth expectations of companies for 2007 based on results for last year," said Grace Cerdenia at online securities firm 2TradeAsia.

Cerdenia said market players were also waiting for the main index to retreat towards the 3,000 support level before coming back into to test the 3,300 points level that was breached Tuesday.

"Some fund managers are starting to cash in on stocks that surged extensively and many are still waiting to position on good support levels before buying again," she said.

"We may also see some portfolio repositioning in sectors that will benefit most in the run-up to the May elections like energy, infrastructure and select property stocks, and those which have breached overbought territory."

"The situation is very ripe for profit taking," said James Lago, head of research at Westlink Global Equities. "Some corporate results that came out support the view that some stocks are fully valued."

"Some people have been too optimistic with their earnings outlook," added Jojo Gonzales, head of research at Philippine Equity Partners.

Philippine Long Distance Telephone led the losers, falling P30 at 2,530. PLDT fell on speculation that its earnings, net of one time items such as gains from the sale of a satellite unit, will disappoint investors.

PLDT chairman Manuel Pangilinan earlier said that the company was likely to post net profit of P35 billion for 2006 if it could sell its mobile satellite business.

"People suspect that the company’s recurring’s earnings is probably flat or weak" so they have to complete the sale of the asset, Lago said.

PLDT rival Globe Telecom lost P20 to P1,385.

Property firms were also down with Ayala Land falling 50 centavos to P16.75 Filinvest Land was off two centavos to P1.80 and Megaworld losing 10 centavos to P2.65.

San Miguel A shares rose 50 centavos to P64.50 while its B shares were steady at P78.50.

— AFP, Bloomberg