MANILA, March 30 (PNA) — The local stock market surged to a new record for a third day in a row on Monday, climbing near 7,900 for the first time, on the back of strong macroeconomic fundamentals and quarter-end window dressing.
The barometer Philippine Stock Exchange index peaked at a new intraday record of 8,007.98 before closing at 7,899.41 from Friday’s 7,899.41. The index marked its 22nd record close for the year.
“Philippines is 22 to 23 times P/E today at 8,000. Higher P/E for an emerging market with our strong macroeconomics and growth prospects is keeping investors optimistic. We are less susceptible to external factors due to the robust domestic economy,” said Nisha Alicer, chief equity analyst at DA Market Securities Inc., in an interview.
P/E ratio, an equity valuation multiple, is defined as market price per share divided by annual earnings per share.
Alicer said the country needs to see a broader rally across stocks beyond index to make the 8,000 level sustainable.
“We’ll need to see a deepening of the market in terms of liquidity and investment options… Recent consolidation has allowed more room for upside. Next resistance would be pegged at 8,200,” she added.
For her part, COL Financial head of research April Lynn Tan said liquidity and quarter-end window dressing are driving the share prices higher.
”From a global perspective, there is this belief or the view remains that liquidity is here today. So that is spurring the market to go up, including the Philippines,” she said.
Tan believes that the stock market rally is sustainable, noting “we don’t see any signs that liquidity will go away soon.”
Almost all counters increased slightly.
Only the sub-indices of mining and oil and property were in negative territory.
Volume was thin at 920.82 million shares, value traded was PHP7.59 billion.
The market breadth was negative with decliners dominating advancers, 100 to 83, while 44 issues were unchanged.
The day’s active stocks were led by Philippine Long Distance Telephone Company, Metropolitan Bank & Trust Company, Universal Robina Corp., Energy Development Corp. and Ayala Corp. (PNA)