Shares climb on positive data, gains in vaccination program

PHILIPPINE SHARES closed the week in the green on positive economic data and progress in the country’s vaccination program. 

The Philippine Stock Exchange index (PSEi) gained 32.08 points or 0.46% to close at 6,907.79, while the all shares index improved by 20.29 points or 0.48% to finish at 4,174.65.  

“Positive news on exports, FDI (foreign direct investments), and government’s larger second-half target spending [are] all putting legs on the market rally,” First Metro Investment Corp. (FMIC) Head of Research Cristina S. Ulang said in a Viber message on Friday. 

Preliminary data from the Philippine Statistics Authority showed the country’s merchandise exports in April surged by 72.1% to $5.71 billion versus the previous year ‘s 41.3% decline. 

Meanwhile, FDI inflows in March more than doubled to $808 million from $337 million in the same month last year. This helped fuel a 45% rise in first-quarter FDI inflows to $2.377 billion, from $1.638 billion in the same period of 2020. 

On the other hand, the government is looking to spend some P2.3 trillion in the second half to help boost the economy, 3.9% higher than the P2.214 trillion in actual expenditures recorded in the same period last year. 

For his part, AB Capital Securities, Inc. Junior Equity Analyst Lance U. Soledad attributed the market’s climb to progress in the country’s vaccination program.  

“The local market rallied today and ended in the positive territory for the third straight week on improving vaccine rollout and vaccine supply, as well as reopening prospects,” Mr. Soledad said in a Viber message on Friday. 

“Average value turnover got thinner for two weeks now which suggests investors are on the more cautious side given the run-up the past couple of weeks,” Mr. Soledad added.  

Value turnover declined to P5.76 billion with 4.13 shares traded on Friday, from the P7.40 billion with 3.06 billion shares that changed hands on Thursday.  

The country on Thursday received some 3.2 million doses of China-based Sinovac Biotech Ltd.’s CoronaVac and the vaccine made by Pfizer, Inc. and BioNTech SA.  

As the country’s vaccination program continues, more establishments such as fitness studios, historical sites, and museums, are now allowed to operate at limited capacity in Metro Manila and nearby provinces of Bulacan, Cavite, Laguna, and Rizal.  

Majority of sectoral indices ended the week with gains except for mining and oil, which declined by 13.79 points or 0.14% to 9,457.55. 

Meanwhile, financials went up by 11.76 points or 0.8% to 1,468.19; holding firms gained 41.14 points or 0.59% to 6,959; industrials increased by 51.1 points or 0.55% to 9,302.40; services rose by 2.37 points or 0.15% to close at 1,542.54; and property inched up by 4.59 points or 0.13% to 3,423.36.  

Advancers beat decliners, 118 against 90, while 50 names closed unchanged.   

Net foreign selling grew to P155.36 million on Friday from the P2.67 million logged the previous day.   

“Market will be inspired by the looming economic reopening yet there could be bouts of profit-taking from the weak hands,” FMIC’s Ms. Ulang said about next week’s trading. “Institutional buyers will provide support though.”  

AB Capital Securities’ Mr. Soledad said he expects the index to trade between 6,840 to 7,000 next week. 

“The Palace signalled relaxed restrictions by next week. If that will be the case, we think that should help sustain positive sentiment,” he said. — K.C.G. Valmonte