Politics

Stocks rise as investors get bullish on economy

2 Mins read
REUTERS

PHILIPPINE STOCKS inched higher on Thursday as investors were optimistic that the economy can absorb monetary tightening after the central bank delivered another large rate hike.

The Philippine Stock Exchange index (PSEi) went up by 11.65 points or 0.18% to 6,403.74 on Thursday, while the broader all shares index rose by 12.30 points or 0.36% to 3,388.60.

First Metro Investment Corp. Head of Research Cristina S. Ulang said the market ended higher as investors remain bullish on the country’s growth prospects.

“The PSEi closed in positive territory after the downswing in early trade largely, on emerging bets that the strong nine-month GDP (gross domestic product) growth of 7.8% will enable the domestic economy to absorb the aggressive interest rate hiking by the BSP (Bangko Sentral ng Pilipinas) with great resiliency,” Ms. Ulang said in an e-mail on Thursday.

A strong economy will also help companies achieve full financial recovery by next year, she added.

Philippine GDP expanded by 7.6% in the third quarter, slightly faster than the 7.5% in the second quarter. This brought the nine-month average to 7.8%, already higher than the government’s 6.5-7.5% target for the year.

Meanwhile, the BSP on Thursday fired off an aggressive 75-basis-point (bp) rate hike, matching the US Federal Reserve’s latest move, as it seeks to stabilize prices and support the peso.

The central bank has now raised borrowing costs by 300 bps since May.

“Philippine shares bucked the trend ahead of the BSP meeting, while US markets tumbled yesterday in response to a weak outlook from retail chain target, as inflation pinches shoppers heading into the holiday season,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message on Thursday.

Philstocks Financial, Inc. Research Analyst Claire T. Alviar said shares went up as the geopolitical tensions between Russia and the North Atlantic Treaty Organization eased. 

“Investors also anticipated the 75-bp interest rate hike of the BSP,” Ms. Alviar added.

Sectoral indices were split on Thursday. Industrials gained 92.33 points or 0.99% to end at 9,421.77; property rose by 14.36 points or 0.51% to 2,823.79; and holding firms went up by 5.94 points or 0.09% to 6,101.77.

Meanwhile, financials declined by 3.62 points or 0.22% to 1,601.86; services went down by 2.66 points or 0.16% to 1,646.88; and mining and oil lost 12.66 points or 0.12% to end at 9,837.12.

Value turnover inched up to P7.3 billion on Thursday with 582.73 million shares changing hands from P7.23 billion with 968.99 million issues traded on Wednesday.

Advancers outnumbered decliners, 95 versus 83, while 48 names closed unchanged.

Net foreign selling stood at P1.23 billion on Thursday, a reversal of the P1.09 billion in net buying seen on Wednesday. — AEOJ