PH stocks shoot up to 20-month high, easing pandemic pains

The stock barometer rallied to the 7,300 territory on Friday, ending at a 20-month high, as investors cheered the country’s lower-than-expected October inflation rate, the latest stream of corporate earnings and the further easing of lockdown protocols in Metro Manila.

The main-share Philippine Stock Exchange index (PSEi) racked up 137.05 points, or 1.9 percent, to close at 7,340.77. Elsewhere in the region, trading sentiment was mixed.

This marked the PSEi’s best finish since ending at 7,369.78 on Feb. 21, 2020.

For the four-day trading week, the main index advanced by a total of 286.07 points or 4 percent.

“Philippine shares closed to a new year-to-date high as inflation came in better than expected and strong third quarter earnings painted a rosier picture of the economy as the country continues to loosen restrictions caused by the pandemic,” said Luis Gerardo Limlingan, managing director at stocks brokerage house Regina Capital Development.

At a year-on-year rate of 4.6 percent in October, ING Philippines economist Nicholas Mapa said the country’s inflation uptick was a surprise if compared to consensus forecast of 4.9 percent.

“Slower-than-expected food inflation helped the headline number edge down after meat inflation decelerated, offsetting higher vegetable and fruit prices. Meat prices stabilized somewhat after the government ramped up pork importation to augment supplies depleted by the proliferation of African swine fever,” Mapa said in a research note.

“The expected spike in transport inflation due to pricey crude oil was contained after base effects from last year’s public transport fare hikes faded,” he added.

But despite the downside surprise, he noted the 10-month inflation average of 4.5 percent remained well-above the central bank’s 2-4 percent target. Nonetheless, he expects the central bank to maintain interest rates at record-low levels for the rest of this year.

All counters ended higher, led by the property counter, which jumped by 3.3 percent, followed by services, which rose by 2.53 percent.

The financial and holding firm subindices both added over 1 percent, while the industrial and mining/oil subindices inched up by less than 1 percent.

Value turnover for the day amounted to P9.42 billion. There was net foreign buying amounting to P695.24 million.

There were 137 advancers that overwhelmed 67 decliners, while 44 stocks were unchanged.

ICTSI was the day’s most actively traded company after announcing better-than-expected third quarter results. The multinational port operator saw a 5.22-percent jump in share price.

SM Prime and GT Capital both added over 4 percent.

Ayala Corp., BDO, BPI and Jollibee all gained over 2 percent.

Globe Telecom, Wilcon and PLDT all added over 1 percent.

AEV, Converge and URC all firmed up by less than 1 percent.

On the other hand, Aboitiz Power shed 1.9 percent, while Metrobank declined by 1.3 percent after announcing its third quarter results.