PSEi returns to 7,400 for first time in six months
PHILIPPINE SHARES rose for a second day on Tuesday to allow the benchmark index to return to 7,400 level for the first time in almost six months, thanks to foreign buying.
The Philippine Stock Exchange index (PSEi) rose 1.42% or 104.84 points to close at 7,446.49. That was the PSEi’s best day since Oct. 26 last year when it finished at 7,494.41.
The broader all-shares index was also up by 1.06% or 47.14 points to end the day at 4,460.56.
“There seems to be increased buying pressure from the foreign funds as they were net buyers today. Right now the range bound market has taken an initial bullish stance heading into second quarter of 2017,” Angping and Associates Securities, Inc. equity analyst Frank Gerard J. Barboza said in a text message.
Foreign investors bought more stocks in volumes more than they dumped resulting in a net buying of P4.08 billion in a trading session that saw P11.94 billion shares changing hands.
IB Gimenez analyst Joylin F. Telagen also cited net foreign buying as the reason behind the rally, saying investors “may be repositioning ahead of first quarter results and better economic growth for the quarter.”
That optimism over the economy was supported by latest results of the Nikkei Philippines Manufacturing Purchasing Managers’ Index (PMI) for March which showed solid growth for the local manufacturing sector.
“Locally, Philippine PMI rose marginally to 53.8 in March, which was a slight improvement from the 53.6 recorded in February,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said.
“The latest reading points to further strengthening in the rate of expansion in the country’s manufacturing, as growth is being driven by the domestic demand from. This stems mostly from buoyant consumers and public infrastructure spending,” he added.
Equities in the banking sector were the most active, with BDO Unibank, Inc. and the Bank of Philippine Islands up by 2.74% and 1.93%, respectively. Shares in Universal Robina Corp., SM Investments Corp., and PLDT Inc. also lifted the PSEi.
“The index should stay above 7400 and establish a new support level at that area, otherwise the old trading range will pull the index back to it,” PNB Securities President Manuel Antonio G. Lisbona said in a text message.
All counters were in positive territory with services leading the gains with a 2.42% or 76.44 point-increase to close at 3,225.07.
Advancers outpaced decliners, 114 to 79, while 42 were unchanged.