Slow growth spooks investors

MANILA, Philippines – Share prices closed lower yesterday after investors digested the third quarter gross domestic product (GDP) results released Thursday, analysts said.

The Philippine Stock Exchange index (PSEi) fell below the 7,000 level again, closing 136.18 points lower at 6,927.07, while the broader All Shares index finished at 3,996.91, down 59.69 points.

All other indexes closed in negative territory.

They said while the six percent third quarter GDP growth figure was robust and an improvement from the previous quarters’ performance, market expectations had to be adjusted downward as the economy needs to grow faster in the fourth quarter to achieve the six percent GDP growth average for the year. Specifically, the economy needs to grow 7.2 percent in the fourth quarter.

“The  local  bourse  slowly  crept  up  back to the 7000 levels as investors cautiously waited for the release of third quarter economic data. However,  gains  were  not  sustained  as  third quarter 2015 GDP data fell shy of market expectations, rising at six percent year-on-year versus a 6.3 percent growth consensus, dampening investor sentiment,” said Jonathan Ravelas, BDO Chief Market Strategist.

“The third quarter growth is an improvement from 5.8 percent in the previous quarter and from 5.5 percent in the third quarter in 2014,” said Socioeconomic Planning secretary and NEDA director general Arsenio Balisacan.

Value turnover hit P16.42 billion as decliners edged out advancers 111 to 60 while 45 stocks were left unchanged.