Main index declines amid valuation concerns
LOCAL EQUITIES extended losses on Thursday, as concerns on the hefty valuations of stocks among investors prompted another sell- off.
The main index moved down 0.28% or 25.29 points to close at 8,738.72, pulling back after moving past the 8,800 mark intraday.
The broader all-shares index, meanwhile, posted a gain of 0.11% or 6.09 points to finish at 5,130.92.
“After two successive days of massive selldowns, the Philippine market still finished on a sour note to start the month of February, as earnings season will soon be starting,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile phone message.
Timson Securities, Inc. equity trader Jervin S. de Celis noted that investors have been concerned about the prices of stocks.
“Our index fell on the third day as elevated valuations of our equities become a main concern for investors especially foreign fund managers...The PSEi is also trading at a hefty valuation of 22x PE (price-to-earnings) ratio last Friday that’s why the sell-off was a bit expected but too exaggerated since the main catalyst came from the western markets,” Mr. De Celis said via text.
Overseas, markets started to recover. The Dow Jones Industrial Average gained 0.28% or 72.50 points to 26,149.39. The Nasdaq Composite index added 0.12% or 9 points to 7,411.48, while the S&P 500 index was flat at 2,823.81, moving up by a mere 0.05% or 1.38 points.
Most local sector counters finished in negative territory, save for property, which managed to rise 0.45% or 17.98 points to 3,957.54.
On the other hand, the mining and oil sub-index dropped 0.56% or 67.60 points to 11,870.35, followed by holding firms which gave up 0.45% or 40.91 points to 8,916.90. Services lost 0.26% or 4.51 points to 1,706.22; financials dipped 0.18% or 4.02 points to 2,219.96; while industrials closed 0.17% or 20.01 points lower to 11,770.55.
Trading thinned yesterday, as a total of 2.75 billion issues switched hands valued at P7.34 billion, lower than the P11.53billion value turnover on Wednesday.
Despite the general decline in the market, advancing stocks outpaced those that lost, 113 to 88, while 54 names were flat.
Foreign investors continued their selling streak, unloading a net P1.36 billion worth of stocks on Thursday, although lower than the P2.33 billion recorded the day before.
Sy-led firms SM Prime Holdings, Inc. and SM Investments Corp. were among the most actively traded stocks of the day, both losing 1.08% to P36.50 each and 0.10% to P1,024 each, respectively, after announcing that the SM group will no longer be acquiring bakeshop chain Goldilocks Bakeshop, Inc.
Mr. De Celis noted that the index may consolidate within the 8,600 to 8,900 range until the earnings season takes place.