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Manila Bulletin devider Business devider The Stock Market devider Local stocks face profit-taking after three-week rally

Local stocks face profit-taking after three-week rally

Published Jan 12, 2026 12:00 am  |  Updated Jan 10, 2026 04:02 pm
Local stock market may face selling pressure this week as investors lock in gains following a three-week rally, while shifting their focus to upcoming data on foreign investment and remittances for further direction.
The Philippine Stock Exchange index (PSEi) has shown a bullish bias recently, surpassing its 200-day exponential moving average for the first time since mid-2025. This move came alongside ₱2.16 billion in net foreign inflows over the past week.
Despite the recent advance, the market remains attractively priced relative to its peers. The PSEi currently trades at 10.6 times price-to-earnings, significantly lower than its five-year average of 17.3 times and the regional average of 18.9 times.
Philstocks Financial Research Manager Japhet Tantiangco said that while the market has momentum, the lack of immediate catalysts could lead to a period of caution.
Investors are monitoring the Bangko Sentral ng Pilipinas’ policy path for 2026, the volatility of the peso, and the broader economic growth trajectory. Global developments, including geopolitical tensions between the United States (US) and Venezuela, are also expected to influence sentiment.
The benchmark index recently broke out of a tight trading range between 5,800 and 6,100, but it now faces a psychological hurdle at the 6,500 level. According to 2TradeAsia.com, historical selling pressure is dense at this threshold.
While cooling inflation supported the New Year rally, a sustained move higher will likely depend on a rebound in private sector capital expenditure and a reversal of the investment slowdown seen in 2025.
Portfolio managers are also advising a defensive tilt amid heightened global risks and volatile capital markets. Analysts noted that a clean break above 6,500 on high volume would signal a structural shift in investor sentiment, while a failure to clear that level could see the index consolidate back toward 6,000.
Stock selection for the year is centering on recovery plays and defensive yields. Nicky Franco, head of research at Abacus Securities Corp., identified renewable energy and mining as top sectors for 2026.
His preferred picks include ACEN Corp., OceanaGold Philippines, and Jollibee Foods Corp. Franco noted that Jollibee’s plan to spin off its international business could provide a catalyst for shareholder value.
COL Financial Group Inc., meanwhile, has added Maynilad Water Services and D&L Industries to its top picks.
COL Financial Chief Strategist April Lee-Tan cited Maynilad’s defensive nature and dividend yield as key draws.
She also highlighted D&L Industries, which is trading at 8.6 times price-to-earnings with a 6.3 percent dividend yield.
The manufacturing firm is expected to benefit from falling commodity prices for inputs like coconut and palm oil, which should bolster margins as financing costs decline.

Related Tags

Philippine Stock Exchange index Philstocks Financial Japhet Tantiangco 2TradeAsia.com COL Financial April Tan Abacus Securities Corporation Nicky Franco
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