Philippine shares closed mixed to firmer on Wednesday after opening on the soft side, with gains fueled by optimism the US Federal Reserve will delay an interest rate hike until after September.
Investors also viewed favorably the first-quarter earnings results reported by companies over the past few days, seeing them as signs of strong corporate performance for the rest of the year.
The Philippine Stock Exchange index (PSEi) finished firmer by 0.13 percent or 10.62 points at 7,881.93. The All Shares index inched up 0.10 percent or 4.34 points to 4,546.74.
Jason Escartin, investment analyst at online brokerage firm 2TradeAsia.com, said the boost came largely from investor expectations of a deferred Fed rate hike.
“Expectations that a rate hike from the Fed might be pushed back further provided a boost to buying of local equities,” Escartin said.
Concern over the timing of the Fed rate increase had been mounting over the past few months, weighing on bank stocks mostly. But investors have since turned more positive that the Fed may delay the rate hike from the earlier-expected date in September.
“Also, players favored shares with good first-quarter results and variables that could help support growth this year,” Escartin added.
IB Gimenez Securities Equity Research Analyst Joylin Telagen described trading as mixed due to a confluence of factors such as better-than-expected first-quarter gross domestic product growth in Japan and housing data from the US. “However, it was dragged by Alliance Global Group Inc. and Emperador Inc. at the close after these companies reported lower earnings.”
Alliance Global Group Inc., the holding firm of taipan Andrew Tan, reported net profit of P5.6 billion in the first three months of this year, down from the P6.25 billion recorded a year ago, as sales in its liquor and fast food business segments dipped.
Alliance unit Emperador Inc., a liquor manufacturer, said its net income for the first quarter of 2015 fell to P1.4 billion from P1.7 billion a year earlier as an increase in liquor taxes this year cut into its margins.
Telagan said: “We expect 7,800 as a strong support. If the Fed minutes give a hint it will be raising its interest rates later, we might welcome back the 8,000 level. But if sooner, we might see selling tomorrow. The Fed minutes will be released tomorrow morning.”
The sectors that lost were financials, holding firms and mining and oil, while those that gained were industrial, services, and property.
The most active stocks that advanced were GT Capital Holdings Inc., Universal Robina Corp., Globe Telecom Inc., Philippine Long Distance Telephone Company and Security Bank Corp., while the top decliners were BDO Unibank Inc., SM Prime Holdings Inc., Metropolitan Bank and Trust Company, Alliance Global Group Inc. and Nickel Asia Corp.
Total volume thinned from Tuesday to 458.15 million shares, valued at P6.26 billion on Wednesday. Decliners outnumbered advancers 88 to 84, while 45 issues closed unchanged.
On Tuesday, the bellwether PSEi closed with a 0.49-percent or 39.12-point loss to 7,871.31. The All Shares index shed 0.39 percent or 17.61 points to 4,542.40.