Q4 growth story brings hope as PSEi rallies by 1.98%
The local stock barometer outperformed regional markets on Thursday as the Philippine economy grew at a faster pace of 6.4 percent year-on-year in the fourth quarter, meeting consensus forecasts.
The main-share Philippine Stock Exchange index (PSEi) racked up 147.62 points, or 1.98 percent, to close at 7,616.35, bucking the downturn across the region. The deadly coronavirus outbreak that started from mainland China has sent jitters to other markets.
For the full year 2019, the country’s growth rate averaged 5.9 percent, marking an eight-year low.
“With growth momentum apparently still sluggish, the need for additional stimulus from both the fiscal and monetary authorities is now even more apparent. We continue to price in a rate cut by the BSP (Bangko Sentral ng Pilipinas) in February, followed up by further easing in May to help rekindle the now scuttled new Philippine growth story,” ING Philippines economist Nicholas Mapa said in a research note.
Christopher Mangun, head of research at AAA Equities, said there might be some hope for the PSEi after recovering by more than 175 points and closing at its high for the day.
“It opened above the 7,475 support level, which is a very positive sign. Trading volumes remain low, which allowed bargain hunters to scoop up shares at lower prices because of the last two days of losses,” he said.While the PSEi may not recover all its losses for the week, Mangun said a close above 7,475 might give investors some optimism.
All counters ended higher, led by the industrial and holding firm sectors, which both surged by over 2 percent.
The financial and property counters both added over 1 percent.
Value turnover for the day amounted to P6.63 billion. Domestic investors mostly supported the local market. There was net foreign selling worth P132.6 million.
There were 117 advancers that edged out 73 decliners while 50 stocks were unchanged.
URC and Metro Pacific both surged by over 5 percent, while Meralco rose by 4.14 percent.
Ayala Land, the day’s most actively traded company, rebounded by 3.55 percent even as President Duterte gave the go signal to probe the Technohub property deal with the University of the Philippines.
SM Investments, BDO and Aboitiz Power all added over 2 percent, while SM Prime, PLDT, Ayala Corp. and Security Bank all rose by over 1 percent.
ICTSI, BPI and Megaworld also gained.
Outside of the PSEi, one notable gainer was Cemex Holdings, which rallied by 8.81 percent. Manila Water also rose by 1 percent.
On the other hand, Metrobank fell by 0.23 percent. Non-PSEi stock Cirtek lost 2.39 percent.