PHL shares decline as investors pocket profits

PHILIPPINE SHARES declined on Monday after investors booked profits from the market’s recent rally.

The Philippine Stock Exchange index (PSEi) went down by 34.14 points or 0.53% to end at 6,403.24, while the broader all shares index lost 10.67 points or 0.31% to 3,385.96.

AB Capital Securities, Inc. Vice-President Jovis L. Vistan said the PSEi went down on profit taking.

“After gaining by almost 13% for the past month and a half, the local equities market was ripe for profit taking. The earnings reporting season is over and attention now shifts to macroeconomic fundamentals,” Mr. Vistan said in a Viber message.

He said while US consumer inflation eased in October, which could lead to slower tightening by the US Federal Reserve, higher prices elsewhere weighed on sentiment. 

“Japan’s October inflation was the highest in four decades while Philippine inflation may not have peaked yet,” Mr. Vistan said.

Consumer prices in Japan excluding fresh food climbed by 3.6% in October, the fastest since 1982.

Meanwhile, Philippine consumer inflation accelerated to a near 14-year high of 7.7% in October from 6.9% in September and 4% in the same month in 2021. This is well above the Bangko Sentral ng Pilipinas’ (BSP) 2-4% target.

“The local bourse dropped … as investors took some profits, on the upside, the index still managed to stay above the 6,400 old resistance line,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar in a Viber message. 

“Moreover, the BSP’s expectation that the Philippine economic growth may slow down in the next two years amid internal and external headwinds, and monetary tightening, weighed on the sentiment,” Mr. Alviar added.

The BSP last week delivered a 75-basis-point (bp) hike to match the Fed as it seeks to rein in rising inflation and support the currency. It has now raised borrowing costs by 300 bps since May.

The majority of sectoral indices ended higher on Monday except for property, which declined by 60.80 points or 2.13% to close at 2,785.09; and holding firms, which went down by 54.49 points or 0.89% to 6,047.32. 

Meanwhile, industrials gained 59.05 points or 0.62% to end at 9,543.82; services went up by 9.20 points or 0.55% to 1,667.56; financials rose by 2.74 points or 0.16% to 1,619.87; and mining and oil climbed by 10.85 points or 0.11% to 9,856.08.

Value turnover rose to P6.24 billion on Monday with 776.16 million shares changing hands from the P5.33 billion with 570.39 million shares issued on Friday.

Decliners outnumbered advancers, 97 versus 87, while 40 names closed unchanged.

Net foreign buying declined to P170.07 million on Monday from the P652.19 million seen on Friday.

AB Capital Securities’ Mr. Vistan placed the PSEi’s support at 6,150 and resistance at 6,450. — A.E.O. Jose