Philippine stocks dropped, with the benchmark index poised for its sharpest fall in 11 months, amid speculation economic growth slowed in the first quarter.
Aboitiz Equity Ventures Inc. (AEV) and SM Prime Holdings Inc. (SMPH) declined more than 3.5 percent. San Miguel Corp. slid after a report the company wants a partner to help fund the development of a toll-road project. First-quarter growth was probably on track to meet this year’s goal of 6 percent to 7 percent, Economic Planning Secretary Arsenio Balisacan said May 24. The economy expanded 6.8 percent in the fourth quarter.
The Philippine Stock Exchange Index (PCOMP) sank 2.1 percent to 7,113.45 at the noon break in Manila, bound for the sharpest drop since June 4. The gauge has climbed 22 percent this year on expectations economic growth will accelerate and as credit ratings agencies raised the nation’s sovereign debt rating to investment grade. The rally sent valuations to a record 20.8 times estimated 12-month earnings on May 15.
“Investors are using forecasts of a weaker GDP growth in the first quarter as an excuse to take profit,” Alex Pomento, Manila-based strategist at Macquarie Group Ltd., said by phone. “The market had a good run for the past 24 months and we view the recent decline as a healthy correction that should allow investors to enter the market at cheaper prices.”
Aboitiz Equity, which has investments in power and banks, sank 3.9 percent, heading for the lowest close since April 16. SM Prime, the largest Philippine mall operator, declined 3.8 percent, bound for sharpest loss since April 23.
San Miguel (SMC), the nation’s largest food and drinks company, sank 3.7 percent, heading for the lowest close since Jan. 22. The company is looking for a partner to help it fund the cost of its airport toll road project, Philippine Daily Inquirer reported, citing President Ramon Ang.
Splash Corp. (SPH) increased 1.6 percent to 1.97 pesos. The company expects double-digit growth in profit this year, BusinessWorld reported today, citing Chief Financial Officer Veneranda Tomas.
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