Stocks inch up on bargain hunting, rating action

PHILIPPINE STOCKS inched higher on Friday after the country’s investment-grade rating was affirmed and on bargain hunting.

The benchmark Philippine Stock Exchange index (PSEi) went up by 0.05% or 3.71 points to close at 6,281.58, while the broader all shares index increased by 0.06% or 2.44 points to 3,737.58.

“The local market posted gains on the back of bargain hunting. Investors also appreciated Rating and Investment Information, Inc.’s (R&I) affirmation of the Philippines’ “A-” credit rating with a stable outlook,” Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message. “Finally, hopes of a Bangko Sentral ng Pilipinas (BSP) rate cut [this] week helped in lifting the bourse.”

R&I on Wednesday affirmed the Philippines’ investment-grade “A-” rating with a stable outlook as it said it expects sustained economic growth and improving incomes amid “robust public and private investments, development of domestic business such as information technology and business process management industry, and population growth.”

For the first half, Philippine economic growth averaged 5.4%, slightly below the government’s 5.5% to 6.5% target for this year.

Meanwhile, BSP Governor Eli M. Remolona, Jr. earlier said that a rate cut is “quite likely” at the Monetary Board’s Aug. 28 meeting amid easing inflation.

If realized, this would be the BSP’s third straight reduction since April. The Monetary Board has lowered benchmark interest rates by a cumulative 125 basis points since it began its easing cycle in August 2024, with the policy rate now at 5.25%.

Meanwhile, week on week, the PSEi dropped by 0.54% or 34.35 points from its 6,315.93 close on Aug. 15, marking its second straight week of decline.

“Without any positive catalyst, the local market succumbed to bearish pressures, leading to an extended decline in last week’s trading. This is the first week since June 9 to 13 that the market continued in a certain direction,” Mr. Tantiangco said. “The local market remains undervalued fundamentals-wise. As of last week’s closing, the PSEi’s price-to-earnings ratio is at 10.8 times. This is below its five-year historical average of 17.3 times and the regional average of 17.6 times.”

The majority of sectoral indices closed higher on Friday. Property went up by 1.02% or 24.69 points to 2,444.46; industrials rose by 0.89% or 80.98 points to 9,112.92; mining and oil climbed by 0.46% or 44.09 points to 9,489.24; and financials increased by 0.09% or 1.91 points to 2,116.45.

Meanwhile, holding firms declined by 0.8% or 42 points to 5,205.46 and services retreated by 0.35% or 8 points to 2,276.18.

Value turnover rose to P6.44 billion on Friday with 803.64 million shares traded from the P5.76 billion with 1.07 billion shares exchanged on Wednesday.

Decliners beat advancers, 97 versus 93, while 50 names were unchanged. Net foreign selling was at P721.91 million on Friday versus the P161.83 million in net buying recorded on Wednesday. — Revin Mikhael D. Ochave