Philippine stocks fell on Friday as investors cashed in on gains made a day earlier when shares soared following the US Federal Reserve’s upbeat assessment of the US economy.
Concerns over a bigger budget deficit in 2010 also triggered a selloff, analysts said.
The benchmark Philippine Stock Exchange index or PSEi lost 0.21%, or 6.05 points, to 2,850.01, while the all-shares index slipped 0.27% to 1,806.98. A total of 3.4 billion shares worth P2.69 billion changed hands. Decliners led advancers 55 to 46, while 57 shares did not move.
"The slight slide in the share prices today was brought about by profit-taking by investors following the recent market advance, [especially after Fed announced that the US, the world’s biggest economy, is stabilizing]," Grace C. Cerdenia, chief operating officer of online brokerage firm 2TradeAsia.com, said.
The Fed said Thursday that US economic activity was leveling out, allowing rates to remain at near zero for an "extended period." That drove a rally in Asian markets that day, including the Philippines.
Ms. Cerdenia said investors unloaded their portfolios after economic managers raised the target budget shortfall to P233.4 billion for next year from P208.4 billion, as part of the government’s economic pump-priming efforts.
Justino B. Calaycay, Jr., analyst at Accord Capital Equities Corp., said investors bracing themselves for a slump in share prices during the traditional "ghost" month of August contributed to the price pullback.
Since investors normally stay on the sidelines in August, news pointing to a global economic recovery won’t help, he said.
"There is already a general consensus that we are not going into a recession, and this was already factored in by the investors," Mr. Calaycay said.
Select industrial, as well as mining and oil issues, pulled down share prices, with the Manila Electric Co. weighing down on the market with an 8.61% loss.
Industrial stocks lost 2.59%, or 111.46 points, to 4,186.82, while mining and oil tumbled by 2.72% or 233.14 points.
GMA Network, Inc., Philex Mining Corp., First Gen Corp., class "A" shares of Lepanto Consolidated Mining Co., Vista Land and Lifescapes, Inc., Aboitiz Power Corp., and Globe Telecommunications Co. all pulled down the PSEi.
On the other hand, International Terminal Container Services Inc., which advanced by 6.49%, led upward movers among index stocks.
Other PSEi stocks that gained on Friday were Ayala Corp, Ayala Land, Inc., SM Prime Holdings, Manila Water Co., Rizal Commercial Banking Corp., Banco de Oro Unibank, Inc., Robinsons Land Corp., Jollibee Foods Corp., and SM Investments Corp. — Gloria Krisana L. Gallezo
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