PSEi claws back to 6,000 on bargain hunting

MANILA, Philippines — Positive results from the government’s investigation into corrupted flood control projects may be the only savior of the stock market after dipping to a six-month low, according to the operator of the local bourse.

Philippine Stock Exchange (PSE) president and CEO Ramon Monzon told reporters on Wednesday that the market’s “very bad” performance was due to the weak investor sentiment.

“The market’s No. 1 ally is confidence,” Monzon said on the sidelines of the Shareholders’ Association of the Philippines’ digital library launch.

What could trigger the benchmark index’s recovery, Monzon noted, would be “very positive results” from Congress’ probe into anomalous flood control projects.

READ: What billions look like: Visualizing the staggering scale of flood control corruption

Relief after 7 days

The Philippine Stock Exchange Index (PSEi) managed to snap its seven-day losing streak and reclaim 6,000 on Wednesday, mostly because of bargain hunters taking advantage of cheap prices.

Local stocks also tracked the upbeat Wall Street sentiment overnight despite the shutdown of the U.S. government.

READ: Wall Street yawns at DC’s looming shutdown as Dow sets new record

By the end of the session, the PSEi surged by 1.22 percent, or 72.57 points, to close at 6,026.03.

Likewise, the broader All Shares Index added 0.93 percent, or 33.83 points, to end at 3,654.62.

A total of 2.46 billion shares worth P6.8 billion changed hands, stock exchange data showed.

Benign inflation

Apart from bargain hunting, the index was also able to break free from its losing streak because of expectations that September inflation remained within the government’s target range, said Japhet Tantiangco, research head at Philstocks Financial Inc.

READ: BSP expects 1.5% to 2.3% September inflation rate

The PSEi recently slipped below 6,000 as investors took cover amid mounting corruption allegations involving high-ranking government officials.

This significantly affected confidence, said Monzon, who joined the Sept. 21 rally on EDSA with other PSE staff members. This was to show the PSE’s solidarity with the Filipino people in calling for an end to corruption.

“A very good, credible investigation [is] the only thing that can bring back confidence,” Monzon added.

Active stocks

All subsectors emerged from the red territory, with mining stocks showing the best recovery.

International Container Terminal Services Inc. was the most actively traded stock as it jumped by 3.05 percent to P486 each, followed by Philippine Seven Corp., down 3.42 percent to P41; BDO Unibank Inc., up 4.06 percent to P138.30; Ayala Land Inc., up 0.21 percent to P24.40; and Bank of the Philippine Islands, down 2.61 percent to P112 per share.

Gainers edged out losers, 99 to 87, while 50 companies closed flat, stock exchange data also showed. /dda