LOCAL share prices bounced back Friday, after JP Morgan said presumptive President Rodrigo Duterte’s economic agenda is an encouraging sign for financial markets, and traders responded positively to the central bank’s decision to maintain its key interest rates, as well as generally positive earnings reports from listed companies.
The benchmark Philippine Stock Exchange Index (PSEi) rose by 1.53 percent or 111.75 to close at 7,436, while the broader All Shares gained 1.32 percent or 57.31 points to end the trading week at 4,412.26.
In a statement released Friday, financial giant JP Morgan said, “We believe that financial markets will welcome the explicit commitment of the incoming administration to keeping the current macro-economic policies, particularly its focus on infrastructure.”
Duterte’s chief economic adviser former agriculture secretary Carlos Dominguez on Thursday laid out the incoming president’s eight-point economic plan.
Luis Limlingan, business development head at Regina Capital Development Corp., explained that equity investors are continuing to buy given positive earnings reports from listed companies, which have largely been in line with expectations, as well as the continued euphoria over the success of the recently conducted natio- nal elections.
“I think investors are continuing to buy on the market, given major companies reporting positive results, which are fairly in line with the consensus. The election euphoria also has not quite fizzled out,” Limlingan said.
Limlingan also noted the decision of the Bangko Sentral ng Pilipinas (BSP) on Thursday to keep key interest rates unchanged contributed to the strong performance of the local bourse.
Friday was the week’s busiest day on the trading floor, with total value turnover reaching P12.89 billion. Advancing shares outnumbered decliners, 112 to 78, while 49 issues were unchanged.
All sub-indices gained substantially, except for the mining and oil and property sectors, which shed 0.49 percent and 0.14 percent respectively, while the services sector ended flat.
Meanwhile, Victor Benavides, general manager of Alakor Securities Corp., explained that since the market suffered a sharp decline in the run-up to the elections, the week’s results were simply a recovery.
“Investors’ fears died down. They now realize that a Duterte administration is really not bad at all, and actually offers a bright future for the market,” Benavides said.
“We are merely recovering what we unduly lost during the pre-elections on account of the impending Duterte presidency. In the recent news, Duterte has become more and more presidential,” he added.
Finally, Jonathan Latuja, equity research analyst at Unicapital Securities Inc. said that the PSEi bucked the regional weakness of global markets as presumed President-elect Rodrigo Duterte revealed his economic agenda.
“Local sentiment is very positive as he promised to continue the incumbent administration’s policies. This is despite concerns brewing abroad regarding the global economy’s slowdown,” Latuja said.