LOCAL SHARES bounced back on Wednesday along with the recovery of international markets, as the index’s steep decline from the 9,000 level brought back valuations to an acceptable level.
The 30-company Philippine Stock Exchange index (PSEi) ended its three-day losing streak yesterday, firming up 1.37% or 117.14 points to 8,667.56. The broader all-shares index also closed 1.15% or 58.17 points higher at 5,086.08.
“The local market took cue from the rebound of US stocks overnight coupled with the overdone decline of the local market over the past six days that brought down the leading relative valuation levels to more reasonable levels,” PCCI Securities Brokers Corp. Research Head Joseph James F. Lago said in an e-mail.
After losing more than a thousand points on Monday, the Dow Jones Industrial Average regained its losses by jumping 2.33% or 567.02 points to close at 24,912.77. The S&P 500 index saw a 1.74% uptick to 2,695.14 as well, with the Nasdaq Composite Index rising 2.13% to 7,115.88.
Meanwhile, Regina Development Corp. Managing Director Luis A. Limlingan said he expects the Bangko Sentral ng Pilipinas (BSP) to increase rates soon as the economy starts to feel the effects of the Tax Reform for Acceleration and Inclusion law, as January headline inflation coming in at 4%.
“Significant drivers were the surge in prices of alcoholic beverage and tobacco from 6.4% in December to 12.3% in January, food and non-alcoholic beverage from 3.5% to 4.5% in January, and restaurants and miscellaneous goods/services from 3% to 3.7%,” Mr. Limlingan said in a mobile phone message.
“Should the next month see no signs of cooling off, we’re inclined to expect the BSP to begin hiking rates in March, not even ruling out the possibility of one this Thursday,” he added.
Sectoral indices moved to positive territory, led by the industrials counter, which advanced 2.11% or 243.68 points to 11,757.26. Services followed, going up 1.71% or 28.89 points to 1,714.65; financials climbed 1.49% or 32.55 points to 2,212.46; property rose 1.36% or 52.83 points to 3,912.43; mining and oil added 1.25% or 144.40 points to 11,653.78; and holding firms increased 0.75% or 65.51 points to 8,755.12.
PCCI Securities’ Mr. Lago noted that the start of the release of earnings reports also contributed to the market’s rise on Wednesday.
“The initial stream of full year 2017 earnings reports while mixed were also encouraging. The slowing down of foreign portfolio selling today also was a factor which also helped the peso recover vis-à-vis the dollar,” he said.
The market saw some 1.28 billion issues switch hands, valued at P9.08 billion, lower than Tuesday’s P10.42-billion value turnover.
Advancers trumped decliners, 127 to 82, while 47 issues ended flat.
Foreigners remained sellers for the ninth day, as net foreign selling stood at P598.98 million, although lower than the P1.44-billion net outflow recorded on Tuesday. — Arra B. Francia