Philippine stocks ended lower Wednesday after briefly touching the 7,000 level on technical correction.
The 30-company Philippine Stock Exchange index (PSEi) traded above the 7,000 in the morning session before closing at 6,958.01, down 15.40 points or 0.22 percent from Tuesday.
The all-shares index also went down by 1.73 points, or 0.05 percent, to settle at 3,759.55.
Regina Capital Development Corp. head of sales Luis Limlingan said investors were waiting for more economic data that would reinforce a potential US rate cut in September.
“The prospect of easing monetary policy has many investors taking positions, reflecting broader market cautious optimism both locally and globally,” Limlingan said.
Indices ended mixed with mining and oil taking the lead, rising by 0.85 percent. while industrial advanced 0.69 percent.
Services declined 0.73 percent, while holding firms dropped 0.54 percent.
Value turnover reached P4.61 billion. Foreign investors remained net buyers, with net inflows amounting to P687.06 million.
Despite the market’s recent run-up, Unicapital Securities Research said the PSEi is still cheaper compared to its peers. It expects trading to be boosted by the possible 50-basis-point rate cut in the second half of the year.
“Looking ahead, with an expected EPS [earnings per share] growth of 11 percent for 2024, our bottom-up analysis suggests a target of 7,000 for the PSEi in FY24, implying a forward P/E ratio of 12.6x. This is slightly lower than our previous target of 7,200 as we now expect lower reduction in policy rates by the BSP of 25 to 50 bps [from our previous estimate of 50 to 75bps],” Unicapital said.
“Downside risks to our view are: prolonged elevated interest rates; escalation of geopolitical tensions disrupting trade supply,” it said.
Among Unicapital’s stock picks are SM Prime Holdings Inc., AREIT Inc. and Metrobank.
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