PSEi rises on first day of 2014 trading
pse.com.ph photo
MANILA, Philippines–Local stocks gained on the first trading day of 2014, tracking a favorable season for equities best described by the “January effect.”
The main-share Philippine Stock Exchange index rose by 94.43 points or 1.6 percent to close at 5,984.26, trending higher for the fifth straight session.
“Historically January is always a bullish month because it’s near the dividend season,” said local stock brokerage Regina Capital.
Like in previous years, the market is still influenced by the positive “January effect,” said Joseph Roxas, president of Eagle Equities Inc. Roxas believes that the outlook for Philippine equities for the rest of the year should be positive despite some volatility arising from the tapering of easy US monetary policy.
In general, some investors are looking forward to a sixth straight year of upswing this 2014 despite volatility arising from the unwinding of easy U.S. monetary policy. In 2013, the PSEi gained by a modest 1.3 percent.
All counters ended in positive territory, led by the financial, property and industrial counters which jumped by over 2 percent.
Trading volume, however, was still thin at P3.82 billion as many trading participants were on extended holiday break.
Market breadth was positive, with 105 advancers beating 36 decliners while 34 stocks were unchanged.
The large-cap stocks that gained in heavy volume were FGEN (+7.35 percent) and URC (+4.33 percent). Outside of the PSEi, newly listed Robinsons Retail rose by 5.07 percent.
BDO, ALI, EDC, ALI and RLC were up by over 3 percent while Metrobank, AGI, Megaworld, SM Prime and BPI gained over 2 percent.
Across the region, trading was mixed ahead of key economic data coming out of Europe and the United States. On the other hand, investors were disappointed with a manufacturing indicator out of China as purchasing managers’ index (PMI) fell to 51 in December, from 51.4 the previous month and below forecasts for 51.2.
“The softening of PMI was broad-based across major sub-indices… This is the first moderation in six months, suggesting that the growth recovery since mid-July might have started to lose some stream. We think the reading could be slightly negative or relatively neutral for markets given expectations for a softening PMI while a reading of 51 is still decent,” investment bank BofA Merrill Lynch said in a research note.
“A moderation in PMI is consistent with our view of a slowdown in sequential GDP (gross domestic product) growth,” it added.
