Local investors snap up stocks on positive GDP data expectations

The local stock barometer rallied Monday as local investors expect the Duterte administration to report good fourth-quarter domestic economic growth data this week.

The Philippine Stock Exchange index (PSEi) gained 141.69 points or 1.96 percent to close at 7,374.35, outperforming mostly firmer regional markets.

Investors took their cue from bullish trading in Wall Street on Friday when businessman Donald Trump was inaugurated as US president. It was the first time in 50 years that US stocks had gone up during a new president’s inauguration.

“After a relatively peaceful inauguration last week, investors resumed bargain hunting on the assumption the Philippines would be one [of the] least vulnerable economies relative to all the global geopolitical uncertainties. China also avoided additional headwinds by reporting fourth-quarter GDP (gross domestic product) growth at 6.8 percent through robust monetary and fiscal stimulus,” said Luis Gerardo Limlingan, managing director at local stockbrokerage Regina Capital Development.

“In addition, investors are positioning ahead of larger economic data coming out during the week. On Thursday, Philippine GDP will be announced with median forecasts so far at around 6.6 percent,” Limlingan said.

Regina Capital estimated the country’s fourth-quarter growth at 6.7 percent, or slightly higher than consensus.

Philippine GDP has so far averaged 7 percent in the first three quarters, buoyed by election spending in the first semester.

The US is also scheduled to release its fourth-quarter GDP data this week. At the same time, Limlingan noted that Bank of Japan was expected to leave its monetary policy unchanged.

Local investors powered the PSEi’s rise Monday. Foreign investors were more cautious as indicated by P142 million in net foreign selling for the day.

Value turnover amounted to P5.61 billion. There were 108 advancers that beat 79 decliners while 45 stocks were unchanged.

The PSEi was led higher by holding firms—a proxy to the domestic economy—whose counter rose by 2.26 percent. The financial, industrial, services and property counters also gained more than 1 percent.

Only the mining/oil counter slipped.

The country’s biggest conglomerate SM Investments led the PSEi higher with its 5.37-percent gain while Ayala Land and Ayala Corp. both rose by more than 3 percent.

Metrobank, BDO Unibank and Universal Robina Corp. all added 2 percent while BPI and ICTSI went up by more than 1 percent.

Security Bank, GT Capital, Aboitiz Equity Ventures and DMCI also contributed gains.

Outside the PSEi, notable gainers were gaming firms Bloomberry (+4.26 percent) and Melco Crown (+4.75 percent).

On the other hand, AGI fell by 1.25 percent while Semirara slipped by 0.14 percent.