MANILA, 3 March — The Philippine market managed to edged up during the past week although it was sluggish in the absence of fresh and exciting economic or political news.
The composite index moved forward a little over a percent with a gain of 14.04 points to 1,410.42 points. Value turnover dipped 58.12 percent to P2.78 billion ($54.29 million) while only 2.5 billion shares of stock were traded.
The trading week on the Philippine Stock Exchange (PSE) was cut short to four days because of a public holiday and when it finally opened for the week, traders noted a lot of profit-taking left over from the previous week.
“Profit-taking has not finished yet after there was a lack of follow-through buying, some investors decided to cash in on gains,” Eagle Equities president Joseph Roxas said.
Mutual Fund Management Co. of the Philippines President Efren Cruz said the sharp initial rebound after three days of losses last week appeared to be premature.
“It may be too soon. Technically you need to consolidate first before moving back up,” he said.
The slowdown in inflows into the market over the past sessions has prompted investors to take profit, said Equitable PCI Bank’s fund manager Edison Yap. “I think investors are now stepping back and looking at the market more rationally,” Yap said. “It’s hard to say where the market is headed because at the end of the day, it all boils down to liquidity,” he added.
“If we don’t get fresh liquidity flowing back into the market we will stagnate. The only way to encourage more liquidity is if we start justifying expectations that the economy is going to do better this year.”
However, United Coconut Planters Bank trust fund manager Vanessa Lim said “people are looking for fresh leads to get back into this market — they are happy to sit on recent gains and then cut positions when there is any small rally.”
DBS Vickers Securities associate director for sales Enrique Sta. Ana said the foreign buying interest seen earlier in the year appeared to have run its course and there were no compelling reasons to push prices up.
“Right now, with these volumes, we do not see any break out (of recent trading ranges),” he said. “There is no real reason to buy, no story out, no major fund flows. As people get fed up waiting, they would probably want to take profits,” he added.
By the end of the trading week, some brokers were even saying the market’s lackluster performance was boring. “It is so boring. We’re all sleepy. Nothing’s happening,” said Henry Ong, KGI Securities vice president for sales. “I would like to think this is more of a consolidation. The index is correcting and the trading volume is low,” he said. “I think the market will rally again very soon, probably next week,” he added.
“This is all part of the consolidation process. The market is gathering steam for the next run-up,” Astro del Castillo, director for the Association of Securities Analysts of the Philippines, said. He added “what’s good about what’s happening in the local market is that despite the consolidation, no one is really selling heavily.”
Traders said this points to continued confidence in the country’s improved fundamentals, which helped boost the main index to its highest closing level in eight months last week, before succumbing to a technical correction. Del Castillo said the market is expected to remain in consolidation in the next few sessions.