Philippine stocks fell, dragging the benchmark index down the most in 11 months, after the BusinessWorld newspaper said the nation’s economic growth may have slowed in the first quarter.
Aboitiz Equity Ventures Inc. declined 3.9 percent and SM Prime Holdings Inc. lost 5.2 percent. San Miguel Corp. slid after a report the company wants a partner to help fund the development of a toll-road project. Data due May 30 may show the economy grew 6 percent in the three months to March 31, compared with 6.8 percent expansion in the previous quarter, BusinessWorld said, citing the median of economists in a survey.
The Philippine Stock Exchange Index sank 2.4 percent to 7,097.51 at the close in Manila, the sharpest drop since June 4. The gauge has climbed 22 percent this year as credit 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, slid to the lowest level since April 16. SM Prime, the largest Philippine mall operator, declined the most since Sept. 20, 2011.
San Miguel, the nation’s largest food and drinks company, sank 4.5 percent. The company is looking for a partner to help it fund the cost of its airport toll road project, the Philippine Daily Inquirer reported, citing President Ramon Ang.