December 11, 2017 | MANILA, PHILIPPINES

PHL stocks end higher after US markets rally

LOCAL stocks advanced by nearly a fifth of a percent at the close of the week on the uptick by index heavyweights PLDT and Globe.

The 30-member Philippine Stock Exchange index (PSEi) gained 0.19% or 14.71 points to settle at 7,578.16 yesterday. The all-shares index also rose 0.24% or 10.89 points to end Friday at 4,532.10.

“[T]he Philippine markets tried to replicate the positive performance of the US, as overnight, financials and industrials led the rally as S&P 500 climbed 17.67 points, or 0.8%, to 2,355.84,” said Luis A. Limlingan, managing director of Regina Capital Development Corp. said.

“US stocks finished higher on Thursday as strong economic data and corporate earnings lifted the main benchmarks,” he said.

“In relation to previous days, the PSEi took some cues from other data such as when [the U.S.] Fed[eral Reserve] released its Beige Book on Wednesday. The U.S. economy expanded at a modest-to-moderate pace between mid-February and the end of March, but inflation pressures remained in check despite more difficulties in attracting and retaining workers,” Mr. Limlingan said.

In the local market, three of the six sub-indices advanced, led by services, which gained 0.66% increase, followed by property (0.50%) and the holding firms (0.27%) counters.

Services was “mainly led by heavyweights GLO and TEL,” Mr. Limlingan said, adding that, “investors bought up these heavily sold issues from the previous days.”

GLO and TEL are the respective stock symbols of telecom companies Globe Telecom, Inc. and PLDT, Inc., each of which gained 1.25% and 1.07%, respectively.

“CEB was the biggest advancer due to oil continuing to decline and every improving tourist arrivals,” Mr. Limlingan said, referring to Cebu Air, Inc., which gained 3.7%.

In contrast, the financials, industrials and mining and oil sectors gave up ground.

“Financials were driven lower as traders sold on news after BPI and BDO released their preliminary Q1 figures,” Mr. Limlingan said, referring to Bank of the Philippine Islands and BDO Unibank, Inc., both of which reported net income growth of 25.6% and 6%, respectively in the first quarter.

“CHIB was the biggest loser as more profit takers are coming out post SRO,” Mr. Limlingan said, referring to China Banking Corp., which earlier undertook a stock rights offering.

“Many brokerages revised many of their fair value estimates for the bank and clients were reacting to these changes. BDO in particular may have experienced more selling pressure after readjusting their [full-year] profit guidance from P28.8 [billion] to P28 [billion],” Mr. Limlingan added.

A total of 1.6 billion shares worth a combined P32.09 billion changed hands on Friday, from the previous day’s a billion shares worth P5.94 billion. A total of 107 companies advanced, whereas 89 declined and 44 were unchanged.

Besides BDO, other active trades were JG Summit Holdings, Inc. and Ayala Land, Inc.

“[N]ext week markets may take their cues from the arrival of the ASEAN delegates,” Mr. Limlingan said, adding that, “There is the possibility of earlier window dressing due to a shortened trading period.”

“In addition, markets may be reacting to the upcoming French elections and the US data coming which will be focusing on PMI and home sales,” Mr. Limlingan added.

All eyes are on France’s presidential elections, the first major poll in Europe after the UK’s Brexit vote. Markets also are looking to the upcoming purchasing manager’s index and home sales data out of the US for cues on possible Fed policy moves going forward.

The US central bank is expected to deliver two more rate hikes this year. -- Jil Danielle M. Caro