PSEi firms up ahead of PH growth report
THE LOCAL stock barometer firmed up for the second session after Monday’s freefall ahead of the release of the Philippines’ second quarter economic performance but trading remained volatile on Wednesday amid China-related concerns.
The Philippine Stock Exchange index added 37.58 points or 0.55 percent to close at 6,867.92. This was even as China’s stock market remained sluggish despite fresh monetary easing measures.
Most other stock markets in Southeast Asia likewise advanced.
On Thursday, the Philippine government is set to announce the second quarter gross domestic product report. Market consensus points to a 5.7 percent year-on-year growth, picking up pace from a revised first quarter growth of 5 percent.
Meanwhile, stock futures also indicate a potential rebound by the closely watched Dow Jones index by 201 points.
At the local market, the index was led higher by the industrial counter, which rose by 2.14 percent, as well as the property counter which gained by 1.92 percent.
The services and mining/oil counters also gained ground.
On the other hand, the holding firm counter slipped by 0.21 percent.
Value turnover for the day amounted to P12.62 billion. There were 122 advancers that overwhelmed decliners while 50 stocks were unchanged.
Meralco led the PSEi higher, rising by 3.19 percent while LTG, ALI and Megaworld gained over 2 percent. PLDT, URC and AP advanced by over 1 percent.
GTCAP, Globe and ICTSI also contributed to the day’s gains.
Outside of the PSEi, Security Bank gained by 1.76 percent in heavy volume.
On the other hand, SMIC slumped by 3.48 percent while BDO, AC and BPI declined.
Local stock brokerage DA Market Securities said on Wednesday that with the index having registered a new low close to the 6,600 level and rebounding thereafter, a short-term bottom may have been achieved. Initial resistance was seen at 7,000.
“However, further volatility may be expected until the index establishes a new firm support,” DA Market said.
Considering that uncertainties persist in external markets – with China market continuing to decline and US Federal Reserve’s interest rate hike decision in Sept. – DA Market said a “risk-off” sentiment could lead to sell-offs.
“Current market conditions call for a nimble short-term trader with tight stops or a value investor to cherry pick market exaggerations. The investor may also decide to wait for bottoming/recovery signals on the index or individual stock,” DA Market said.
But on a longer term, DA Market said it’s still “bullish” on the Philippines , which it said could be distinguished from regional peers as it would benefit from lower oil prices and weaker peso. A peso depreciation, it noted, would benefit the outsourcing sector as well as overseas Filipino-assisted households, which are key drivers of the real economy.
