Shares shrug off 4-year high inflation print
Philippine shares rallied on Tuesday, with the benchmark index jumping over 120 points, after the June inflation print came within expectations. The Philippine Stock Exchange Index (PSEi) rose 2.04 percent, or 126.37 points, to 6,309.99 while the broader All Shares Index added 1.5 percent, or 50.24 points, to 3,398.70. The Philippine Statics Authority said June inflation surged to 6.1 percent, its highest since 2018, on climbing food, oil and transport costs. However, it was within the 5.7 to 6.5 percent forecast range of former Bangko Sentral ng Pilipinas (BSP) chief and now Finance Secretary Benjamin Diokno. Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said full-year inflation could peak at over 6 percent through October and possibly ease from November to December this year “barring any new shocks.”
The latest consumer price reading is seen to put the BSP on track to raise the local policy rate by 25 basis points to 0.5 percent on Aug. 18.“Higher local policy rates would lead to some increase in borrowing/financing costs that could lead to lower earnings and valuations, as well as slow down the economy as an unintended consequence in the quest to fight off inflationary pressures,” Ricafort warned on Tuesday. All PSE subsectors closed higher on Tuesday, led by property, up 3.41 percent, and financials, up 2.44 percent.
Chronically low trading volume at the PSE persisted, with 509.2 million shares, valued at P3.98 billion, changing hands. Foreigners continued to shed their holdings by a net figure of P146.1 million.
Property giant Ayala Land was the top traded stock on Tuesday as it rose 2.72 percent to P26.40 per share.
It was followed by Semirara Mining and Power Corp., up 2.49 percent to P37.10; Converge ICT Solutions, down 5 percent to P20.90; Universal Robina Corp., up 3.17 percent to P114; and BDO Unibank, up 2.77 percent to P118.70 per share. Other heavily traded companies were: AC Energy, up 4.09 percent to P8.40; SM Prime, up 4.02 percent to P37.50; SM Investments, down 1 percent to P792; Monde Nissin, up 5.3 percent to P13.90; and International Container Terminal Services, up 1.2 percent to P186 per share.
