PHILIPPINE shares closed higher on Wednesday as investors priced in the country’s faster-than-expected gross domestic product (GDP) growth in the second quarter.
The Philippine Stock Exchange index (PSEi) gained 43.63 points or 0.65% to close at 6,666.86 on Wednesday, while the all shares index improved by 15.63 points or 0.38% to end at 4,111.61.
“GDP growth of 12% is a sentiment lifter apparently,” First Metro Investment Corp. Head of Research Cristina S. Ulang said in a Viber message. “That plus the upbeat first half corporate earnings show the Philippine economy is capable of bouncing back, helped by vaccination and policy stimulus.”
“Even foreign sentiment has improved with the return of intermittent foreign buying,” she added.
“Many are also assessing whether the country [can] sustain this level of expansion in the coming quarters once base effects fade,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a separate Viber message.
The economy grew by 11.8% year on year in the second quarter, marking the end of a 15-month recession caused by the pandemic, based on data released by the Philippine Statistics Authority on Tuesday. It beat the 10.6% median GDP growth estimate of 20 analysts in a BusinessWorld poll last week.
The double-digit GDP growth was mainly due to base effects from the record 17% contraction in the April to June period last year when the country was under its strictest and longest lockdown.
However, the economy shrank by a seasonally adjusted 1.3% from the first quarter, reflecting the impact of the reimposed lockdown in March to April when cases surged. The economy expanded by 3.7% in the first half of the year, still below the government’s 6-7% target for 2021.
Metro Manila is under a two-week lockdown until Aug. 20 to curb a fresh surge in infections.
“Philippine [shares] were traded up as investor bought up in anticipation of names that may be affected by the release of the quarterly MSCI rebalancing results later,” Mr. Limlingan added.
Majority of sectoral indices posted gains on Wednesday except for services, which declined by 17.57 points or 1.07% to 1,617.03, and mining and oil, which dropped by 102.48 points or 1.05% to finish at 9,639.87.
Meanwhile, property climbed 83.08 points or 2.7% to 3,153.93; holding firms rose by 30.76 points or 0.46% to 6,671.91; financials went up by 6.63 points or 0.46% to close at 1,437.91; and industrials gained 16.11 points or 0.17% to 9,381.25.
Value turnover increased to P6.83 billion with 1.82 billion issues traded on Wednesday, from the P6.31 billion with 1.56 billion issues logged the previous day.
Decliners narrowly beat advancers, 84 against 81, while 56 names closed unchanged.
Foreigners turned buyers anew with P513.87 million in net purchases on Wednesday, a reversal of the P26.7 million in net outflows logged on Tuesday. — K.C.G. Valmonte