PH shares fall sharply on lower-than-expected GDP

The local stock barometer fell sharply on Thursday as domestic first quarter growth came in lower than market consensus at 5.6 percent.

The Philippine Stock Exchange index (PSEi) shed 171.07 points, or 2.16 percent, to close at 7,755.62, dragged down by around P1.62 billion in net foreign selling.

Sentiment across regional markets was also mostly sluggish.

“This is the first time in four years that [Philippine gross domestic product (GDP)] growth was sub-6 percent and is being attributed to the delayed signing of the 2019 national budget. We likewise infer from the latest numbers that the GDP growth slowdown was largely also a result of the very tepid growth from the trade component; from the previous quarter, exports and imports growth have contracted 8.6 and 4.1 percentage points, respectively. Government spending contracted 5.2 percentage points,” said Robert Dan Roces, economist at Security Bank.

“Looking at the details of the first quarter GDP print, we see broad-based weakness—it suggests that the budget impasse was not the only reason for the slowdown, in line with our view, household consumption was the only source of strength. Government expenditure, capex (capital expenditure), and net exports all slowed in the quarter,” Standard Chartered Bank Asia economist Chidu Narayanan said.

All counters fell at the local market, led by the financial and holding firm counters, which both slumped by over 2 percent.

The industrial, mining/oil and property counters all declined by over 1 percent.

Value turnover for the day amounted to P9.15 billion.

There were 109 decliners that edged out 88 advancers, while 43 stocks were unchanged.

Investors sold down shares of JG Summit, which slid by 7.75 percent, while AGI tumbled by 5.69 percent.

BDO fell by 4.22 percent while AEV and BPI all lost over 3 percent.

ICTSI, SM Prime, SM Investments, Metrobank, URC and Megaworld all slipped by over 2 percent.

Ayala Corp. and GT Capital both declined by over 1 percent, while Ayala Land, Jollibee and Metro Pacific also slipped.

SMC and PLDT bucked the day’s downturn, both gaining over 3 percent.

Outside the PSEi, one notable gainer was Holcim Philippines, which surged by 6.5 percent on talks that a buyout deal may be closed soon.