PSEi buoyed by strong earnings

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Upbeat first-half earnings reports pulled the Philippine Stock Exchange index (PSEi) out of negative territory in mostly flat trade Wednesday, spared from the prevailing negative sentiment on overseas markets and local profit-taking to stay close to the 7,000 level.

The benchmark index registered a modest 0.04 percent gain, adding 2.75 points to close at 6,986.24, while the wider All Shares index closed at 4,177.55, gaining 2.23 points or 0.05 percent.

Astro del Castillo, managing director of First Grade Finance Inc., said in a brief phone interview that the market was only slightly higher on Wednesday because of the dip in overseas markets and profit-taking from the two-day equities run since Monday this week.

“Some investors opted to profit take after days of rallies. There are also glitches in overseas markets, and Japan’s [economic figures are]still weak,” del Castillo said.


All three major US indexes declined in overnight trade, led by the Nasdaq’s 0.27 percent slump. In economic news, Japan’s gross domestic product registered a 6.8 percent contraction the in second quarter, the worst since the catastrophic March 2011 earthquake, after a sales-tax increase in April hurt household spending.

“This is the last week of the surge of corporate earnings results. We’ll see next week what will happen, we’re waiting for market moving news. For now, the market is consolidating within 6,900 to 7,000,” del Castillo added.

Banco de Oro Chief Strategist Jonathan Ravelas and BPI Director Richard Anthony Liboro both agreed with del Castillo in separate text messages, citing mixed market results on current stock valuations.

“The recent run of earnings supports current valuations of stocks in the market. We remain within the 6,800 to 7,000 range,” Ravelas said.

“Mixed market performance of the PSEi caused a flat market. If you look at the sub-indices, financial, holding firms and property were down while industrial, services and mining and oil were up. The PSEi has been up for three consecutive trading sessions for a cumulative 1.5 percent [market increase],” Liboro added.

The sectoral indices were mixed, with holding firms dipping 0.29 percent or 18.39 points to 6,235.87; property down 5.45 points or 0.21 percent at 2,634.33; and financials off by 0.07 percent or 1.21 points at 1,646.23. Industrials picked up 0.72 percent or 76.47 points to 10,722.70 while services rose 0.55 percent or 11.67 points to 2,146.85; mining and oil advanced 38.60 points or 0.22 percent to 17,579.08.

Among the most active companies, Ayala Land was flat at P31.70 per share while First Gen Corp. was the sole loser with a 0.66 percent dip or 15 centavos to P22.65. Gainers included PLDT, up 0.26 percent or P8 to close at P3,124; Cebu Air Inc., up 0.86 percent or P0.50 at P58.65; and Ayala Corp., up by 0.07 percent or P0.50 at P680. Other advancers included Energy Development Corp., BDO Unibank Inc., Marcventures Holdings Inc., SM Investments Corp. and GT Capital Holdings Inc.

Despite finishing in positive territory, Wednesday’s trade saw more losers than gainers among individual issues, 86 to 80, with 53 unchanged. 1.146 billion shares changed hands, valued at P7.983 billion.

On Tuesday, the PSEi closed at 6,983.49, up 0.39 percent or 26.83 points, while the wider All Shares index was 0.28 percent or 11.64 points firmer at 4,175.32.

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