Bucking regional slump, PSEi finishes near 7,000-level

MANILA, Philippines — Philippine equities bucked a regional downturn on Wednesday to close near the 7,000-level, as foreign investors bet anew on local stocks despite a slew of bad economic news in the previous day.

Foreign investors returned to the Philippines amid muted market action in the US, sending the Philippine Stock Exchange index (PSEi) up 1.36% to close at 6,902.54. The broader All Shares index gained a smaller 1.05% at the end of midweek trading.

All sub-indices finished in the green, led by property counter which rallied 2.57%. Industrial stocks came next with a 1.35% gain, followed by financials (1.34%), holding firms (0.92%), mining and oil (0.69%) and services (0.24%).

Sought for comment, Beatrice Lopez, equity analyst at Regina Capital, believes a tepid lead from Wall Street likely prompted investors to return to the local bourse. Elsewhere in Asia, Tokyo, Hong Kong, Sydney, Singapore, Seoul and Taipei slipped on Wednesday, though Shanghai, Wellington and Jakarta joined Manila in the rally.

“The US market were relatively muted last night, so foreign investors likely shifted their attention to other markets like the Philippines instead,” Lopez said in a Viber message.

For Rastine Mercado, research director at China Bank Securities, investors were unbothered by bad news at home, which include a renewed rise in unemployment rate in April and a more pessimistic outlook from the World Bank amid tighter lockdowns.

“We think investors, at this point, continue to keep focus on improving prospects for the months ahead given the continuing pick-up in vaccinations, and further relaxation of business and mobility restrictions,” Mercado said in an e-mail.

Foreigners turned buyers on Wednesday, yielding a net foreign buying of P1 billion. A total of 2.02 billion shares worth P7.6 billion were traded during the day.

Regina Capital’s Lopez said the main index may breach the 7,000-mark in the next days “should indicators continue gaining buying pressure”, although profit-taking is also likely. ChinaBank’s Mercado agreed.

“We expect the market to head higher tomorrow following today’s surge. However, we expect stronger selling pressure and volatility to emerge near the 7,000-7,100 resistance as some investors may look to take profit more aggressively,” he said. — with a report from AFP