June 6 (Bloomberg) -- Philippine stocks advanced after an 11 percent slump from a record high drove valuations to the lowest level since February.
The benchmark Philippine Stock Exchange Index gained 0.5 percent to 6,588.40 at 11:21 a.m. in Manila, after slumping as much as 2.7 percent earlier. The gauge was valued at 18.3 times projected 12-month earnings at yesterday’s close, the cheapest since Feb. 3, according to data compiled by Bloomberg. The index’s 15-day volatility rose to 28, the highest level in a year. SM Investments Corp. gained for the first time in six days, while Ayala Land Inc. rallied 2.8 percent.
The nation’s shares have slumped since climbing to an all-time high on May 15 as foreign investors sold stocks on speculation the U.S. Federal Reserve would reduce the pace of monetary stimulus. Overseas funds sold a net $147 million of Philippine stocks in the three days through June 5, according to data compiled by Bloomberg. The selloff was an “extreme overreaction,” Philippine Stock Exchange President Hans Sicat said in an interview with ABS-CBN News today.
“The market has reached oversold levels and valuations have turned attractive for some investors,” Jerome Gonzalez, who helps manage $237 million at Philequity Management Inc., said by phone today. “Investors are looking at technical support between 6,300 to 6,500. We expect the market to remain volatile and it’s hard to predict how long this consolidation will last.”
SM Investments Corp., gained 2.1 percent, rallying from a five-day, 15 percent slump. Ayala Land Inc., the nation’s largest property developer, climbed 1.5 percent, after CB Richard Ellis said office vacancy rates in key Manila districts fell to an all-time low in the first quarter and rental rates rose by as much as 5 percent.
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