PSEi slips as market turns to earnings after GDP

THE MAIN INDEX dropped only slightly on Thursday as traders continued to pin their hopes on positive corporate earnings with economic growth in the second quarter slowing to a three-year low.
The bellwether Philippine Stock Exchange index (PSEi)dropped 0.39% or 30.75 points to close at 7,820.71. Meanwhile, the broader all-shares index climbed 0.15% or 7.21 points to 4,715.82.
The Philippine economy grew 6% in the second quarter, slower than the downward-revised 6.6% GDP growth in the first quarter as well as the 6.7% pace logged in the same period last year.
This was also slower than the 6.8% median estimate in a BusinessWorld poll conducted last week.
Jervin S. de Celis, equity trader at Timson Securities, Inc., said the index’s muted decline was “surprising.”
“The PSEi may not have overreacted to the slower 2Q GDP (gross domestic product) since some of the biggest blue-chip stocks have reported positive earnings. So these companies are weathering the slowing GDP figures and rising inflation rate,” Mr. De Celis said in a mobile message. “Maybe that also provided a cushion for the market to not fall deep…”
Luis A. Limlingan, managing director at Regina Capital Development Corp., noted that despite the disappointing GDP data, “volume was strong enough to limit selling pressure to 60 to 70 points lower throughout, until eventually paring losses down to just 30.75 points.”
Thursday’s close also reflected investors’ anticipation of the policy meeting of the Bangko Sentral ng Pilipinas (BSP), which could further affect Friday’s trading.
After the market’s close, the BSP announced that it decided to hike interest rates by 50 basis points (bp) effective Friday, August 10.
The decision was within market expectations and marks the third time the BSP raised policy rates this year after two 25-bp increases each in May and June to tame inflation.
Most counters ended in negative territory Thursday, August 9. Holding firms shed 0.43% or 33.97 points to 7,742.15; financials fell 0.37% or 7.03 points to 1,855.65; mining and oil dropped 0.37% or 38.44 points to 10,251.89; and services slid 0.13% or 2.05 points to 1,538.46.
Meanwhile, industrials jumped 0.31% or 34.79 points to 11,159.88 and property rose 0.08% or 3.15 points to 3,891.74.
Value turnover fell to P6.33 billion Thursday, August 9, from Wednesday’s P8.64 billion as 1.13 billion issues switched hands.
Foreigners extended their buying for a second consecutive day, even as net purchases slid slightly to P322.97 million on Thursday from the P325.87 million on Wednesday.
Losers outnumbered advancers, 121 to 90, while 34 issues were unchanged. — J.C. Lim