PSEi closes at new record above 6,600

Philippine stocks closed beyond the 6,600 level for the first time on Tuesday, as analysts noted that the continued stream of funds from overseas provide liquidity for the market's momentum. The Philippine Stock Exchange index (PSEi) closed up 0.84 percent or 55.49 points to 6,620.72, its 18th all-time high this year and eclipsing the earlier record 6,565.23 posted last Monday. The benchmark index first hit 6,600 at 6,600.69 at 11:08 a.m. on cautious buying of select stocks. On Tuesday, it likewise hit a new intra-day record of 6,632.56 beating the 6,582.51 also reached lat Monday, Philippine Stock Exchange's online Market Information. The broader all shares index was also up 0.52 percent to 4,141.29 Tuesday. Most indices were in the positive territory except for mining and oil, which continued its downtrend to dip by 0.33 percent. The upswing was led by property and financials, rising by 1.89 percent and 1.05 percent, respectively. Over 2.34 billion shares were traded at P10.25 billion. Decliners outnumbered gainers 94 to 75, while 52 issues were unchanged. "It's a liquidity-driven rally," said Jose Vistan Jr., research head at AB Capital Securities Inc. Vistan said the market was "boosted by a positive backdrop of prospects of investment grade rating, good economic growth and positive outlook for corporate earnings." Claire Quiray, analyst at Regina Capital Development Corporation, said liquidity was funneled into select stocks, like Ayala Land Inc. (ALI), Ayala Corporation (AC), Manila Electric Company (MER), and BDO Unibank Inc. (BDO), and newcomer Philippine Business Bank (PBB). Vistan noted that investors could still look into buying select stocks despite the market being at expensive, overbought levels as "there's still space for growth." He sees the PSEi ending the year at the 6,800 or 6,900 levels. "Market has been overbought and overvalued, but momentum is still there," Vistan said. But investors must look at fundamentals of companies when buying being mindful of the market's price-to-earnings (P/E) ratio, said Quiray, who is also president of the Stock Market School, a market education initiative of the PSE. P/E ratio is at over 20 times, meaning investors are now paying 20 times more for every peso of future earnings, noted Quiray, . The analyst and stock market educator sees a 6,200 support for the market. — BM, GMA News