Lack of direction drags PSEi to one-week low

Manila, Philippines – Conglomerates and banking shares sank on Monday to drag the main index to its worst finish in one week in search for solid leads, brokerage houses said.

The Philippine Stock Exchange index (PSEi) finished down 0.43 percent at 6,288.88.

Of the six counters, financials shed the most – losing 1.46 percent, led by BDO Unibank, Inc. and Bank of the Philippine Islands.

Holding firms ended 0.32 percent down from Friday’s session. Blue chips Aboitiz Power Corp., SM Investments Corp., and Ayala Land, Inc. were all in the red.

“The market appears to be experiencing some profit-taking from names that increased last week,” Regina Capital said in a note to investors.

“Moreover, on a broader scale, the market seems to be in a consolidation phase, with investors likely waiting for more news before taking clearer directions,” the note added.

Another brokerage firm, PhilStocks Financial, Inc., echoed that sentiment.

“The local market has been alternately moving between gains and losses for 10 weeks already as investors remain indecisive of its direction,” PhilStocks said in a note.

The brokerage firm’s fundamental and technical analysis yielded that the Philippine stock market “remains undervalued,” with the PSEi’s price-to-earnings ratio at 10.9x, below the five-year historical average of 17.3x and the regional average of 17.4x.

Last-minute earnings reports came out. Alliance Global Group, Inc. (AGI) said its net income rose by an annual 19 percent to P15.1 billion in the first half, excluding one-off gains from the deconsolidation of a subsidiary. AGI shares gained 0.14 percent, or a centavo, to P7.26 each on Monday.

Trading thinned to P6.18 billion, and net of extraordinary block sales, to P5.6 billion, with about three stocks advancing for every four that retreated.

Even Wall Street could not provide direction.

US stocks ended mixed last Friday, retreating from record levels as investors locked in profit after a rally, Regina Capital said.