MANILA, Philippines – After a recent bloodbath, the Philippine stock market recovered strongly yesterday, on better-than-expected second quarter economic growth figures.
The Philippine Stock Exchange index (PSEi) rallied 3.59 percent or 206.15 points to end at 5,944.21, bringing the main index back on the winning track for this year.
It snapped a two-day decline that resulted in a 423.15-point drop for the main index en route to an eight-month low that erased year-to-date gains. PSEi closed at 5,812.73 on Dec. 28, 2012.
“Sustained robust economic growth, an overnight decent rise in US equities and technically oversold market conditions lent a positive bias to Thursday’s trades,” said Justino Calaycay Jr., an analyst at Accord Capital Equities Corp.
“Overseas concerns somewhat dissipated and we were greeted by good news about the economy so the market reacted favorably,” said Astro del Castillo, managing director of First Grade Finance Inc.
Grace Cerdenia, an analyst at brokerage firm 2Trade-Asia.com, said the sizeable drop in the past few days and the strong economic growth helped the local market.
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The Philippine economy expanded 7.5 percent in the second quarter, matching China’s growth and outpacing Indonesia’s 5.8 percent, Vetnam’s five percent, Malaysia’s 4.3 percent, Singapore’s 3.8 percent and Thailand’s 2.8 percent.
Positive news abroad also boosted investor confidence yesterday.
Wall Street also posted gains on easing worries over a potential US military strike in Syria while stocks of oil firms rallied.
The Dow Jones industrial average rose 0.3 percent or 48.38 points to 14,824.51 while the broader Standard & Poor’s 500 index added0.3 percent or 4.48 points to 1,634.96.
Asian markets like Japan’s Nikkei 225 (+0.91 percent) and Hong Kong’s Hang Seng index (+0.84 percent) were also in the green.
“From being the worst performing market in the last two days, the PSEi emerged with top billing in the region yesterday,” Calaycay said.
Locally, all counters were in the positive territory, led by property firms that surged 4.64 percent or 100.03 points to 2,256.05.
The value of shares traded eased to P9.69 billion from P13.62 billion on Wednesday. For the first time this week, advancers outpaced decliners, 117 to 38, while 34 stocks did not change.
Almost all active stocks, save for Manila Electric Co. (-3.99 percent), were in the green, led by top-traded SM Investments Corp. (+4.26 percent) and BDO Unibank Inc. (+7.48 percent).
Hefty gains were recorded by GT Capital Holdings Inc. (+13.04 percent) and LT Group Inc. (+12.5 percent), which are set join the basket of 30 companies that form the PSEi.
Despite yesterday’s rally, traders still expect cautiousness to persist in the next few days.
“Caution might still be there given the issues on Syria,” Cerdenia said.
“The real concern is the brewing uncertainties in the Middle East, which could slow down global economic growth,” del Castillo said.
The same headwinds that pulled share prices lower will still remain, Calaycay said.