Philippine Stocks Drop Most in Three Weeks on Record Valuations
Philippine stocks fell, dragging the benchmark index down the most in three weeks, after a four- day rally drove the gauge above 7,000 for the first time.
Alliance Global Group Inc. (AGI), which has a Manila casino venture with Genting Hong Kong Ltd., and Philex Mining Corp. (PX), the nation’s largest metals producer, led the slide, losing more than 4 percent.
The Philippine Stock Exchange Index (PCOMP) sank 0.9 percent to 7,055.12 as of 11:35 a.m. in Manila, heading for the sharpest loss since April 2. The measure rallied 4.9 percent in the past four days to a record 7,120.48, pushing valuations to an all- time high of 20.4 times 12-month projected profits, according to data compiled by Bloomberg.
“Valuations have always been an issue,” Marvin Fausto, who helps manage about $20 billion as chief investment officer at Manila-based BDO Unibank Inc., said by phone today. “This is a natural correction from yesterday’s exuberance of reaching the 7,000 level for the first time.” BDO Unibank is the nation’s largest bank by assets.
The Philippine Stock Exchange Index has surged 21 percent this year as fourth-quarter economic growth data beat estimates and after Fitch Ratings awarded the nation its first investment- grade debt rating. The Philippine index trades at 22.8 times reported earnings, the third-highest valuation in the Asia- Pacific region after Japan and South Korea, according to data compiled by Bloomberg.
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