By Arra B. Francia
OPTIMISM about the general economy and some foreign bourses’ record highs propelled the Philippine Stock Exchange index (PSEi) to pierce the 8,300 barrier to end yesterday’s trading at a new peak.
PSEi closed 8,312.93 yesterday, 56.65 points or 0.68% higher than the previous trading day, while the all-shares index closed 24.64 points or 0.51% more at 4,892.
“Our markets soared to a new high today, climbing further into record territory in sync with US markets also hitting new highs in yesterday’s closing,” the PSE quoted its president and chief executive officer, Ramon S. Monzon, as saying in a statement.
“Investors continue to remain bullish about the prospects of the Philippine economy.”
The PSEi has gained 21.52% year to date.
The benchmark index had broken through 8,300 amid trading on Sept. 21 (8,321.81) and 22 (8,314.44) but had been unable to sustain that level till the closing bell on those days.
Last month saw PSEi’s finish peak three consecutive times: 8,144.91 on Sept. 14; 8,180.85 on Sept. 15 and 8,294.14 on Sept. 18.
“The market went up because of a positive global economic outlook, and there’s very good US data that came out yesterday,” UPCC Securities Corp. equities trader Aristotle D. Reyes, Jr. said in a phone interview yesterday.
Reuters yesterday reported that a measure of US factory activity surged to a near 13-and-a-half-year high last month, while the Asian Development Bank last Sept. 26 upgraded its previous economic growth forecasts for “developing Asia” — a driver of world economic expansion that clocked an actual 5.8% in 2016 — to 5.9% in 2017 and to 5.8% in 2018 from the 5.7% for both years that was pencilled in April.
“Some stock exchanges in our neighbors went up also. I think… TOPIX reached all-time high,” Mr. Reyes said.
“It’s a better environment.”
Wall Street yesterday hit new highs, with the Dow Jones Industrial Average rising 0.68% to end 22,557.60, the S&P 500 Index gaining 0.39% to 2,529.12 and the Nasdaq Composite Index adding 0.32% to close 6,516.72.
Most Asia-Pacific markets were similarly up, with Japan’s Nikkei 225 and TOPIX Index, Hong Kong’s Hang Seng Index and the MSCI AC Asia Pacific rising 1.05% to 20,614.07, 0.65% to 1,684.46, 2.25% to 28,173.21 and 0.13% to 161.38, respectively.
Australia’s S&P/ASX 200 Index, however, fell by 0.49% to 5,701.44.
“Philippine stocks broke new ground once more and US stock benchmarks traded in record territory Monday afternoon, as equities resumed a steady run-up that could set the tone for the final three months of 2017,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile phone message.
UPCC Securities’ Mr. Reyes also cited government plans to further ease foreign ownership restrictions, saying: “Then there’s news yesterday that the government is looking at lifting foreign ownership rule so they want to relax it; so there’s a catalyst for us.”
Both Socioeconomic Planning Secretary Ernesto M. Pernia and Finance Secretary Carlos G. Dominguez III have said the government plans to start with economic sectors that will not need time-consuming legislation via a review of the Foreign Investment Negative List that should be out before yearend.
Also to be opened up — via legislation — are key sectors like retail trade and public utilities.
Among yesterday’s most actively traded stocks, those that gained were led by PXP Energy Corp. (which surged 13.75% to P7.86 apiece); Puregold Price Club, Inc. (4.57% to P54.90); Alliance Global Group, Inc. (2.68% to P16.84) and Security Bank Corp. (2.44% to P252 per share).
Yesterday’s most active stocks that lost were led by Jollibee Foods Corp. (which gave up 0.25% to P242 apiece); GT Capital Holdings, Inc. (0.08% to P1,205) and Universal Robina Corp. (0.07% to P152.50 each).
Regina Capital’s Mr. Limlingan noted that the market should establish “a firm base” above 8,300 before climbing further “[p]ero dapat kasi (but there should be) no negative shocks from the market.”
“We’re trying to establish a firm base above 8,300. If we can do that, then we can hit 8,500, but any negative externalities may send us back to 8,000.”
Mr. Reyes said the brokerage has revised its own year-end projection for PSEi to 8,800-9,000.
“As the market continues to be like this, and the Christmas season is on its way, maybe we can reach 8,800-9,000, because some companies hint that their earnings will go up also for the third quarter and fourth quarter,” he explained.
“So there’s not much bad news or bad catalyst right now.”