Stock Market

PSE index back above 8,000 on bargain hunting

Posted on June 08, 2017

SHARES rebounded on Wednesday and regained hold of the 8,000 level as investors picked up bargains ahead of key events this week and amid bullishness on the government’s tax reform program.

The Philippine Stock Exchange index (PSEi) resumed its ascent yesterday to close at 8,002.32, up 49.20 points or 0.61%. It bested Monday’s year-high close of 8,001.38, but is still way off the market’s all-time high of 8,127.48 logged on April 10, 2015.

The broader all shares also closed positively, gaining 19.96 points or 0.42% to 4,760.27.

Investors have kept their optimism on local equities, analysts said, with some even expecting the main index to further strengthen for the rest of the trading sessions this week.

Luis A. Limlingan, business development head at Regina Capital Development Corp., said investors “resumed their bargain hunting mode despite risks ahead of key events in major economies Thursday.”

“It is perceived that the Philippines is in a less risky situation than other markets,” he said.

Mr. Limlingan said in the US, stocks closed marginally lower again on Tuesday “as investors turned jittery ahead of a UK general election and continuous worries on FBI’s (Federal Bureau of Investigation) former boss, who will give testimonies to the Senate.”

“Traders see the ECB (European Central Bank) meeting and [former FBI Director James] Comey’s testimony on Thursday providing a short-lived market reaction,” he added.

He said investors were cautious in taking positions before risk events later this week including the UK elections, ECB’s policy decision and a testimony by Mr. Comey on his investigations into Russia’s involvement in the 2016 election.

The United Kingdom will hold its general elections on Thursday, while the US Federal Reserve will hold its rate-setting meeting on June 13-14, where traders are pricing in a fresh rate hike.

Miguel A. Agarao, vice-president Philequity Management, Inc., said the PSEi is “likely to hold around here or higher because of optimism over tax reform, which may lead to a credit rating upgrade in the future.”

“Foreign inflows have also been very strong,” he added.

On Wednesday, foreigners remained net buyers at P849.99 million, up from the previous session’s P196.2-million net inflow.

All sectoral indices likewise finished higher yesterday. Property rose 49.80 points or 1.33% to 3,775.86; services went up 14.99 points or 0.86% to 1,756.86; mining and oil climbed 93.84 points or 0.74% to 12,633.25; industrials added 70.59 points or 0.63% to 11,140.56; financials gained 3.84 points or 0.19% to 1,963.65; and holding firms inched up 6.6 points or 0.08% to 7,901.84.

Value turnover reached P10.31 billion, up from P8.18 billion the other day, with 2.89 billion shares changing hands. Gainers outpaced losers at 120 against 86, while 42 names finished unchanged. -- V.V. Saulon