PSEi rallies ahead of GDP report

MANILA, Philippines - The stock market rallied yesterday on expectations of a strong gross domestic product (GDP) growth for 2016.

The benchmark Philippine Stock Exchange Index soared 141.69 points or 1.95 percent to finish at 7,374.35 while the broader All Shares index rose by 60.51 points or 1.38 percent to end at 4,426.14.

Most of the sectors likewise closed in positive territory recording huge gains – 2.26 percent for the holding firms index, 1.57 percent for the services gauge and 1.49 percent for the financials index.

Total value turnover reached P5.61 billion.

Market breadth was positive as advancing stocks outpaced decliners, 108 to 79 while 45 stocks were left unchanged.

The National Economic and Development Authority (NEDA) is expected to announce the fourth quarter and full year 2016 gross domestic product performance on Jan. 26.

Moody’s Analytics expects the economy to have accelerated to 7.05 percent in 2016 as it is expected to have accelerated 7.2 percent in the final quarter of last year,

The economics research arm of the global debt watcher said growth was driven by domestic demand.

If Moody’s fourth quarter forecast of a 7.2 percent expansion in GDP turns out to be accurate, the economy’s 2016 growth will hit 7.05 percent or at the upper end of the government’s six to seven percent GDP growth target for 2016 and higher than 2015’s 5.8 percent growth.

Commenting on yesterday’s strong market performance, Lexter Azurin, head of Research at Unicapital, said the market rallied as investors are starting to price in a favorable GDP figure this week.