PSEi posts steady climb on rosy growth outlook
THE Philippine Stock Exchange index (PSEi) weathered global political tensions and the lack of significant local leads to breach the 7,700 mark this month, as traders looked to the country’s economic growth prospects.
Year to date, the market is up 11.99% from its end-2016 close of 6,840.64.
The PSEi’s peak for the month was logged at 7,726.45 last April 26, driven by bargain hunting and as US stocks rallied to fresh highs.
Meanwhile, last month’s low was April 3’s close of 7,341.65, which was the last time the market closed in the 7,300 level, having climbed steadily since then.
The month saw the bellwether PSEi reach multi-month highs, with bets on the Philippine economy’s growth prospects boosting market sentiment despite volatility abroad due to uncertainties about the Trump administration’s plans and the Federal Reserve’s next move, the French presidential election last week, and geopolitical tensions involving the US, China, Syria, and North Korea.
“All economic factors for growing economy are in place [and there is also] optimism about the country in terms of confidence,” Summit Securities President Harry G. Liu said in a text message last week.
Last month, the International Monetary Fund (IMF) said it expects the Philippines to sustain its growth momentum over the next two years to 2018 banking on increased fiscal spending and a recovery in global demand, with the government’s reform agenda seen broadly on track to boost the local economy.
The multilateral lender kept its 6.8% forecast for gross domestic product (GDP) growth this year, and announced an even higher estimate at 6.9% for 2018 under the April edition of its World Economic Outlook report.
The IMF’s estimate compares with the World Bank’s 6.9% projection for GDP growth this year, and is higher than the 6.4% given by the Asian Development Bank. It also falls within the government’s 6.5-7.5% growth goal for 2017, and will keep the Philippines as one of the fastest-growing economies in Asia.
Month on month, the broader all shares index also rose 4.08% to 4,579.20. Year-to-date, foreigners were on the selling side, dumping shares worth P7.93 billion.
“The stock market is a barometer, and technical is showing a good signal. Fundamentals tell us what to buy and technical signals when to buy,” Mr. Liu said.
“We’re going to see the index shine bright among the Asian markets as the ASEAN (Association of Southeast Asian Nations) summit draws the eyes of the international investment community to the country,” AP Securities, Inc. equity trader Frank Gerard J. Barboza said in a text message.
Local markets were closed on Friday to give way to the country’s hosting of the ASEAN Summit, and will remain shut today for Labor Day. -- A.B. Francia