PSEi rises to 7,200; inflation data awaited
THE stock market firmed up on Monday as investors resumed bargain-hunting and repositioned portfolios ahead of Thursday’s release of June inflation data.
The bellwether Philippine Stock Exchange index (PSEi) gained 0.48 percent or 34.28 points to end at 7,227.96 while the wider All Shares inched up 0.12 percent or 5.37 points to finish at 4,398.15.
“The [PSEi] bucked the regional downturn and shrugged off ongoing global trade tensions to kick off the second half positively despite thin turnover as investors continued to acquire select beaten-down blue chips while positioning for Thursday’s inflation data,” brokerage firm SB Equities, Inc. said in a market note.
Regina Capital Development Corp. Managing Director Luis Limlingan said continued bargain-hunting persisted despite continued trade war fears that prompted declines elsewhere in the region.
In Manila, only the industrial sector registered losses, falling by 0.28 percent.
Volume turnover was thin at only 780 million issues valued at P4.79 billion traded.
A total of 116 winners led 94 losers while 40 issues were unchanged.
Also yesterday, brokerage firm Philstocks Financial, Inc. downgraded its 2018 outlook for the PSEi to a range of 7,500-7,700 from 11,000 previously.
The benchmark index fell into bear territory last month, dropping by over 20 percent from a record close of 9,058.62 last January 29.
|
Philstocks research head Justino Calaycay Jr. said domestic factors such as rising inflation, higher interest rates, weak consumer spending and the peso’s depreciation would continue to weigh on the stock market.
Still to be considered, he added, are the escalating trade tensions overseas and the government’s delayed search for a third major telecommunications player.
“Also, one of our failed assumptions was we projected a 20-percent growth in listed companies’ earnings but even the first quarter (Q1) performance did not hit a 10-percent increase,” Calaycay said.
The PSEi only grew by 8.6 percent in the January-March period, he noted.
“We were expecting a lot. As I said, our major narrative underlying [the]optimism was the ‘Build Build Build’ rollout. In a way, we probably did [place]too much trust on it … as it is, most of it (the projects) are still on the paper,” he said.
Earnings will have to pick up and stabilize, and economic growth maintained, to help the stock market regain strength.
“We are looking at August for the market to bottom,” Calaycay said.
The brokerage firm maintained its outlook of P54-55:$1 exchange rate, gross domestic product growth in the 6.3-6.5 percent range, and at least one more Bangko Sentral ng Pilipinas (BSP) rate hike hike following two adjustments in May and June.
For inflation, Philstocks expects an easing in August, with a full-year result between 4.3-4.5 percent.
Investors were advised to avoid food and beverage bets as companies in the sector will remain under threat from rising inflation and the weak peso.
The post PSEi rises to 7,200; inflation data awaited appeared first on The Manila Times Online.