Share prices tumbled after weaker-than-expected gross domestic product (GDP) results for the third quarter dashed market optimism on Thursday, especially as traders had room to cash in on the previous day’s year-to-date high.
The Philippine Stock Exchange index (PSEi) lost 1.24 percent or 91.25 points to close at 7,265.34, while the All Shares index slid 1.05 percent or 45.42 points to end the session at 4,279.97.
Third-quarter GDP growth came in at 5.3 percent, the slowest growth rate in almost three years, lower than the 7 percent recorded in the third quarter last year, and the 6.4 percent of the second quarter this year.
The third-quarter slowdown lowered investors’ optimism on the market, and is likely to make it hard for the benchmark index to go beyond 7,400 points in the near future, said Luis Limlingan, managing director of Regina Capital Development Corp.
“Obviously, the market was down because of the GDP numbers that came out. It was very disappointing for investors as expectations were picturing the GDP to go slightly above last quarter’s,” Limlingan said.
“It was mainly pulled down by slower government spending, while the private sector did their part. If government spending was much higher, GDP would be much more aligned with the people’s expectations,” he added.
Property stocks weighed heavily on the market, with SM Prime Holdings Inc. on the losers’ frontlines as it sold its treasury shares via overseas placement at a discount of P16.98 per share from Wednesday’s close at P17.88 apiece. SM Prime shares went down 4.81 percent or P0.86 to close at P17.02 per share.
Asked if the GDP result will further tint the market red, Limlingan said that the PSEi will likely “continue its consolidation as window dressing for next year will be driving the market next week,” which is seen to provide a slight a push on the market.
A Christmas rally is also anticipated, but will likely not be as high as expected given the negative GDP, he added. Outside market forces will also continue to affect the market in the following days.
“We’re seeing consolidation for the rest of this week. Window dressing next year will drive the market next week. Also, I think the Christmas rally wouldn’t be as expected. For this year, the 7,500 to 7,600 consensus may be revised. Still, 7,400 [an all-time record high]is possible,” Limlingan said.
“But as NEDA chief Balisacan said, 2015 may be good on increased government spending. So investors may find a little upside in the market,” he added.
He said the market is expected to trade in a range of 7,250 points to 7,360 in the next few days.
The sectoral counters were painted red on Thursday’s close: Financials down 0.97 percent or 16.85 points at 1,712.07; industrials decreased 0.98 percent or 117.20 points to 11,815.88; holding firms fell short 0.71 percent or 45.28 points at 6,334.35; services slumped by 0.90 percent or 19.57 points to 2,151.33; mining and oil dipped 0.03 percent or 5.08 points to 15,981.42; and property dropped by 2.87 percent or 83.76 points to 2,830.41.
Only Alliance Global Group Inc. had gains at the market close; PLDT ended flat, while the rest of the 10 most active issues were decliners.
The rest of the active companies all lost 1 percent to 5 percent: SM Prime Holdings Inc., SM Investments Corp., Energy Development Corp., Ayala Land Inc., Ayala Corp., Megaworld Corp., Puregold Price Club Inc., and Metropolitan Bank and Trust Company.
Total volume traded amounted to 4.28 billion shares, while value turnover ballooned to three times the amount changing hands a day earlier at P27.3 billion. Decliners outnumbered advancers, 129 to 53, while 39 stocks were unchanged.
On Wednesday, the main PSEi jumped to its record high for the year: gaining 0.96 percent or 69.74 points to end at 7,356.59. The broader All Shares index also advanced 0.77 percent or 33.05 points to 4,325.39.