PSEi rides on China bounce, Greek debt deal hopes

THE LOCAL stock barometer inched up for the second session in a row on Friday as regional markets became a bit more hopeful over debt-strapped Greece and the measures taken by China to support its bludgeoned stock markets.

The main-share Philippine Stock Exchange index gained 14.9 points or 0.2 percent to close at 7,392.59, wiping losses earlier in the session.

Elsewhere in the region, stock markets were mostly up as investors were encouraged by the recent recovery in Chinese markets while expectations of a deal for Greece increased ahead of a European leaders summit this weekend.

At the local market, gains were capped by reports that Philippine export earnings declined by a steep 17.4 percent year-on-year in May, with electronics exports falling by 7.5 percent year-on-year.

“The decline in exports was sharp, reflecting deteriorating demand from markets such as China and the EU. That said, we do not forecast weak goods exports to have a very large bearing on growth as the Philippines has other growing income sources such as services exports and remittances. Still, the question is whether policy makers can do anything to offset lacklustre external demand. We believe there is fiscal space to speed up spending,” said HSBC economist Trinh Nguyen.

“This will impact growth most directly. From the monetary side, domestic demand is still strong, helped by steady income flows. The BSP (Bangko Sentral ng Pilipinas) will likely refrain from changing interest rates and likely allow some currency weakness,” she said.

In afternoon trade, however, the local market managed to ride on the upswing in the region. Index heavyweight PLDT led the index higher with its 2.17 percent gain alongside Megaworld, which advanced by 2.59 percent. ALI and Jollibee also contributed to the PSEi’s gains.

Value turnover for the day amounted to P6.8 billion. There were 87 advancers which edged out 70 decliners while 54 stocks were unchanged.

Meanwhile, the PSEi’s rise was tempered by the decline of URC (-4.15 percent). Semirara also fell by 1.28 percent while SM Prime, AC, BDO, Globe, SMIC and Meralco also fell.

Among non-PSEi stocks, the notable decliners were Nickel Asia (-1.96 percent) alongside retailers SSI (-2.41 percent) and RRHI (-1.12 percent).