PSEi flat as investors weigh Trump’s trade policy

The local stock barometer was flat on Tuesday as investors weighed newly-inaugurated US president Donald Trump’s protectionist trade policy pronouncements.

The Philippine Stock Exchange index shed 3.7 points or 0.05 percent to close at 7,370.65. Elsewhere in the region, sentiment was mixed after Trump signed a memorandum sanctioning the US’ withdrawal from the Trans-Pacific Partnership (TPP). He also announced plans to renegotiate the North American Free Trade Agreement.

But with the US withdrawal from the TPP, BPI Securities president Michaelangelo Oyson said the Philippines would fare better than other countries given that its gross domestic product was domestic-driven and not dependent on exports.

“I remain bullish that we will hit 8,000 this year, likely in the first half. (Year) 2017 could be a year of two halves- (with) first half positive and second half a correction,” Oyson said.

He said tax reform would be key to a re-rating of the Philippines, referring to a positive change in earnings outlook that would make investors accept higher price to earnings multiples.

“Bull market is not over,” Oyson said. “It’s time to buy when everyone is cautious. We see opportunities.”

At the local market, the decline was led by the cyclical financial (-0.16 percent) and property (-0.97 percent) counters.

On the other hand, the services counter gained by 1.14 percent while the industrial, holding firm and mining/oil counters also firmed up.

Value turnover for the day amounted to P7.89 billion.

Despite the PSEi’s slight decline, market breadth was positive as there were 97 advancers that edged out 86 decliners while 49 stocks were unchanged. Since Monday, investors were loading up stocks ahead of the release of the country’s fourth quarter gross domestic product results.

Market consensus points out to a year-on-year GDO growth of at least 6.6 percent for the fourth quarter.

The PSEi was weighed down by MPI which fell by 2.13 percent as well as property giants ALI and SM Prime which both declined by over 1 percent. BDO, Semirara, URC and Megaworld also slipped.

On the other hand, the day’s index losses were tempered by Ayala Corp. which gained 2.71 percent while ICTSI rose by 1.99 percent.

SM Investments, Metrobank, LTG and PLDT all firmed up.

Outside the PSEi, notable gainers included Bloomberry, which surged by 7.48 percent on the back of a rekindled gaming play now that the Philippines has repaired diplomatic ties with China. Infrastructure firm Megawide also rallied by 6.21 percent.