MANILA, 10 February — The Philippine market lost all its gains of the previous week due to profit-taking, although analysts said the losses would have been greater if there had been no bargain hunting at the end of the trading week.
The composite index thinned by 41.86 points or 3.02 percent as it retreated to 1,344.45 points.
Value turnover slipped more than 50 percent to 2.79 billion pesos ($54.1 million). Actual trading consisted of only 4.29 billion which was less by 21.06 percent.
Stock market regulars said the actual figures were boosted by the release early in the week of benign inflation figures and an upgrade by Moody’s Investment Service on the country’s credit outlook capped losses. The country’s annual inflation hit a 21-month low in January at 3.8 percent, the government announced Tuesday, while Moody’s Investor Service upgraded the country’s rating outlook to stable from negative on Monday.
The trading week started out slow and analyst Oliver Plana of Asiasec Equities Inc. said “the US market was down and almost all of the regional markets are trading lower, that’s keeping the drag on the market right now.”
“Sentiment continues to be positive but you cannot prevent the market from using the Dow Jones as a reason to take profits,” Plana added.
Wall Street has been grappling with a crisis of confidence in the aftermath of the collapse of energy trading giant Enron Corp.
Edison Yap, fund manager of Equitable-PCI Bank Trust, said the thinning volume of trades may also mean foreign fund managers who entered the market since the start of the year might have filled up their allocation for Philippine exposure.
But there is a chance fund managers may increase their allocation to the Philippines following the Moody’s upgrade.
The Moody’s upgrade shows that there’s more stability in the country now.” Yap said.
Midweek, AB Capital analyst Jose Vistan said “the market is caught in the middle of a technical correction but is still being flooded by positive economic news about improving investor confidence, fresh investments and benign inflation.” “The market is still consolidating. We are still holding at the support level of 1,360 with resistance at 1,400. As we get more corporate earning results, the market will get a better sense of where it is headed,” said BPI Securities stock analyst Roberto Cano.
Vanessa Lim, fund manager of United Coconut Planters Bank (UCPB) Trust said “the market’s upside has been strong enough for people to realize it’s time to take profits… All the positive news has been factored in, you have to see more good news for the rally to continue.”
