This, after the PSEI on January 20 rallied to 4,822.08, an all-time record, as investors remain bullish on Philippine economic prospects and amid a rally on better-than-expected data abroad.
On Friday, the All-Shares Index also declined 0.95 percent to 3,210.69. The subindices showed mixed results, with mining and oil alongside financial companies ending on positive territory while holding firms, services and property firms dropped.
Gains last week came despite a National Statistical Coordination Board report showing that the Philippine economy grew by only 3.7 percent last year, below the target range of 4.5 percent and 5.5 percent.
However, investors are betting that improved liquidity and an increase in government spending will help fuel growth this year.
The Bangko Sentral ng Pilipinas also decided to cut banks’ reserve requirement ratio by three percentage points starting April as new rules covering reserve funds take effect . The changes will “increase the effectiveness” of the reserve ratio as a policy tool, Gov. Amando Tetangco said in a statement.
Meanwhile, US stocks soared on Friday as investors cheered a strong jobs report, indicating that the world’s largest economy continues to recover.
The Dow Jones Industrial Average on Friday rose 1.23 percent to 12,862.23, a four-year high. The S&P 500 rose 1.46 percent to 1,344.90 while the Nasdaq rose 1.61 percent to 2,905.66.
The US Labor Department said 243,000 jobs were added in January and unemployment dropped to 8.6 percent, beating expectations.
This week: Stock traders remain cautious given the steep rise in the Philippine index. Some analysts were expecting the measure to begin consolidating last week.
“We’re still cautious because stocks don’t move in a straight line,” said a trader, who noted that the strong performance in the US could lend some support to domestic markets. He noted that liquidity remains strong which helps lift equities in general.
Stocks to watch: Longer-term investors are advised to bet on companies likely to benefit/participate in government’s plans to ramp up infrastructure spending including conglomerates and banks.
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