Economic contraction no shocker; profit seekers push PSEi up

The local stock barometer yesterday gained slightly on muted market reaction to the slight dip in the country’s first quarter economic output.

The main-share Philippine Stock Exchange index (PSEi) firmed up by 13.89 points or 0.25 percent to close at 5,653.16 on selective buying of large-cap stocks.

Joseph Roxas, president of stock brokerage Eagle Equities, said the market might have expected a worse gross domestic product (GDP) number for the first quarter.

“Our market ended flat today with almost no reaction to the first quarter GDP that came in at -0.2 percent. The last time the economy contracted was in 1998 during an extreme El Niño and Asian financial crisis,” said Christopher Mangun, head of research at AAA Equities.

“Most expected some growth in the first quarter as it only included two weeks of community quarantine. The PSEi traded lower for most of the day but the lack of selling prompted buyers to come in and take advantage of cheaper stock prices,” he said.

Mangun said there may be more profit taking on Friday, the last day of the trading week.

The gains were led by the property counter, which surged by 1.75 percent, while the financial and holding firm counters both rose by less than 1 percent.

The services and mining/oil counters both declined by over 1 percent, while the industrial counter slipped by close to 1 percent.

Value turnover for the day was thin at P4.86 billion. There was net foreign selling of P302.18 million.

Despite the PSEi’s slight gain, market breadth was nega­tive. There were 112 decliners that overwhelmed 63 advancers, while 42 stocks were unchanged.

Investors loaded up on shares of property giant SM Prime and conglomerate Ayala Corp., which rose by 3 percent and 3.6 percent, respectively.

The gains were offset by the 3.76-percent decline in PLDT, the day’s most actively traded company.

GMA-7 dropped by 7.46 percent due to profit-taking after the previous day’s run-up—a knee-jerk reaction to the shutdown of rival broadcasting network, ABS-CBN. —DORIS DUMLAO-ABADILLA