Shares rise as House approves 3rd stimulus bill

PHILIPPINE shares closed higher on Wednesday on the House of Representatives’ approval of a third stimulus package amounting to more than P400 billion to help boost the economy amid the coronavirus pandemic.

The bellwether Philippine Stock Exchange index (PSEi) improved 214.26 points or 3.23% to end at 6,841.69 on Wednesday, while broader all shares index rose 94.68 points or 2.35% to close at 4,117.98.

Philstocks Financial, Inc. Research Associate Claire T. Alviar said in a mobile phone message that the market improved due to positive investor sentiment on the approval of House Bill No. 9411 or the Bayanihan to Arise as One Act on third and final reading.

Ms. Alviar added that the decision of the government to keep Metro Manila and its nearby provinces of Bulacan, Cavite, Laguna, and Rizal under general community quarantine also affected sentiment.

AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail that the market closed in positive territory on the slight improvement in the country’s Manufacturing Purchasing Managers’ Index (PMI).

IHS Markit said on Tuesday that the country’s manufacturing PMI reached 49.9 in May, a slight uptick from 49 in April but still below the 50 neutral mark that delineates contraction from expansion.

“We expected more downside as inventors were taking profits from last week’s rally, which was what we have been seeing in the last few trading days,” Mr. Mangun said.

“The lack of selling pressure in [Wednesday]’s session was a clear sign that most investors were willing to hold on longer instead of locking in their profits. This drew buyers back into the market which ultimately pushed prices a lot higher,” he added.

All sectoral indices closed higher on Wednesday. Property went up 144.35 points or 4.4% to 3,420.50; holding firms increased by 238.62 points or 3.58% to 6,887.42; industrials climbed 225.10 points or 2.54% to 9,087.78; services gained 35.15 points or 2.36% to 1,521.69; financials inched up by 12.93 points or 0.9% to 1,447.33; and mining and oil rose by 74.86 points or 0.81% to end at 9,320.12.

Advancers beat decliners, 153 against 52, while 49 names ended unchanged.

Value turnover on Wednesday reached P9.51 billion with 1.90 billion issues switching hands, down from the P14.78 billion with 4.08 billion issues logged in the previous trading day.

Net foreign buying rose to P1.82 billion on Wednesday from the P341.37 million recorded on Tuesday.

“The rally is starting to look like what we saw back in October and if continues like this, we are going to see substantially higher valuations in the short-term,” Mr. Mangun said.

“The sentiment is improving as hopes for economic recovery are rising, thus, we expect further upside but only up to 6,900 or the market’s resistance level,” Philstocks Financial’s Ms. Alviar added. — Revin Mikhael D. Ochave