PSEi proves resilience amid week’s battering

The local stock barometer firmed up slightly on Friday while investors remained generally cautious given the breakout of a contagious new virus from mainland China and unrelenting activity from the Taal Volcano.

The main-share Philippine Stock Exchange index (PSEi) added 7.06 points or 0.09 percent to close at 7,623.41 in thitrade. Across regional markets, trading sentiment was muted.

For the week, the PSEi shed a total of 99.17 points or 1.28 percent as President Duterte’s tirades against the Ayala group spooked investors. This week, scrutiny on Ayala Land’s Technohub deal with the premier state university University of the Philippines took center stage.

Expectations of further monetary easing and stronger domestic economic growth this year, however, allowed the PSEi to bounce to the 7,600 levels. This was after the Philippines reported a 6.4-percent fourth quarter 2019 gross domestic product (GDP) growth, in line with market consensus.

“We expect growth to continue to rise in 2020, driven by our sustained fiscal spending and fixed investment outlook. President Duterte has already signed the 2020 budget, in addition to extending to the validity of the 2019 budget, providing the administration with additional funds to disburse in the year ahead,” British banking giant HSBC said in a research note.

Despite faster GDP growth, HSBC expects the BSP’s monetary easing cycle to continue this year. It expects a 50-basis point overnight borrowing rate cut in the first half of this year alongside a 200-basis point cut to the reserve requirement ratio.

On Friday, the local market was boosted by the industrial, services, mining/oil and property counters. The financial and holding firm sectors declined.

Value turnover was thin at P5.72 billion. There was P556.51 million in net foreign selling for the day. —Doris Dumlao-Abadilla