Connect with us

Hi, what are you looking for?

Economy

Stocks drop on profit taking, economic outlook

By Revin Mikhael D. Ochave, Reporter

SHARES ended in negative territory on Wednesday as investors booked profits and as market sentiment was affected by the revised gross domestic product (GDP) forecast of the World Bank for the Philippines.

The bellwether Philippine Stock Exchange index (PSEi) fell 101.01 points or 1.4% to end at 7,102.66 on Wednesday, while the broader all shares index dropped 32.92 points or 0.76% to close at 4,253.13.

Philstocks Financial, Inc. Research Associate Claire T. Alviar said the market ended weaker on profit taking, which was further dampened by the trading day’s net foreign selling result.

Net foreign selling on Wednesday reached P685.74 million, a turnaround from the foreign inflows worth P113.94 million seen on Monday.

“At the 7,200 level, PSEi’s price-to-earnings ratio is already at 21x which is overvalued compared with its historical average of around 18x so traders took profits already after [Tuesday]’s break,” Ms. Alviar said in a mobile phone message.

Ms. Alviar added investor sentiment was dragged by the World Bank’s revised forecast for the country’s GDP performance this year.

In its latest Philippines Economic Update released Tuesday, the World Bank once again lowered its GDP forecast for the Philippines this year to an 8.1% contraction from the 6.9% slump penciled in last October.

The government’s economic team expects GDP to shrink by 8.5-9.5% this year.

For AAA Southeast Equities, Inc. Research Head Christopher John Mangun, the bourse dropped as investors were concerned about the possible spike in local coronavirus disease 2019 (COVID-19) cases after the holiday season as a result of increased mobility and gatherings.

“Investors are not willing to pay a higher price for blue chips, at least not before the holidays. They also may want to see how well the economy performs this December before justifying a higher valuation,” Mr. Mangun said in an e-mail.

Most sectoral indices at the PSE closed in the red on Wednesday. Property declined 65.4 points or 1.8% to 3,558.60; holding firms went down 132.64 points or 1.78% to 7,313.74; services retreated 25.46 points or 1.64% to 1,522.02; and financials shrank 7.02 points or 0.47% to 1,477.88.

On the other hand, mining and oil climbed 336.38 points or 3.81% to 9,159 while industrials increased 69.48 points or 0.74% to 9,443.78.

Value turnover on Monday stood at P9.88 billion with some 99.2 billion issues switching hands, higher than the previous session’s P9.56 billion with some 45.27 billion issues.

Advancers outnumbered decliners, 132 against 117, while 27 names ended unchanged.

“We may continue to see the main index move sideways between 6,700 and 7,200 in the coming weeks,” Mr. Mangun said.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Economy

THE BANGKO SENTRAL ng Pilipinas (BSP) sees the country posting a wider balance of payments (BoP) deficit this year as the global outlook remains...

Investing

HMRC’s new penalty regime for late filing and late payments of VAT will be fairer but more complex with interest being charged on all...

Economy

Economic managers said they “strongly support” the creation of the Maharlika Wealth Fund (MWF), after lawmakers agreed to remove a provision in the bill...

Investing

If you’ve been waiting ages for an online order to arrive, you’re not alone. Companies including ASOS, H&M and JD Sports have been getting...

Investing

Ulster University economists expect the Northern Ireland economy to shrink next year, followed by a weak recovery in 2024. The Ulster University Economic Policy...

Investing

The number of people working in programming and computer consultancy has risen by more than 250,000 workers over the past decade, according to Census...

You May Also Like

Investing

The minute that any question pops into your head, you can simply ask Google. No longer do we have to pour over books and...

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Investing

Browsing history makes referring to sites and pages you’ve visited in the past seamless. It’ll help you recall what page you checked out on...

Investing

Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.