• PSEi drops on weaker earnings, China data

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    Philippine equities dropped on Thursday on the back of weaker-than-expected earnings, and lower than expected Chinese manufacturing figures.

    The Philippine Stock Exchange index (PSEi) slipped 0.59 percent or 46.55 points to 7,835.38, while the All-Shares index declined by 0.83 percent or 37.79 points to 4,508.95. On Wednesday, the main PSEi closed with a 0.13-percent or 10.62 points gain to end at 7,881.93.

    Luis Limlingan, Regina Capital Development Corp. managing director, said in a phone interview that weak Chinese manufacturing data dampened sentiment across Asia, offsetting the relief provided last night by the U.S. Federal Reserve’s release of the minutes of its most recent meeting.

    “The big data that was pinning us was the Chinese manufacturing index that only inched up 49.1 percent from 48.9 percent last month. That was the big data that was pulling the market. Also, US markets are bearish so people are taking some precaution,” Limlingan said.

    He said recent first-quarter earnings reports were “rather disappointing” for investors, pointing to lower profits at Emperador Inc. and parent firm Alliance Global Group Inc. (AGI).

    Emperador’s first quarter net income fell to P1.4 billion from P1.7 billion same time last year, while AGI’s earnings dropped to P5.6 billion from P6.25 billion a year ago.

    “Next week, the market mover will be the first-quarter GDP [gross domestic product]figures. The safe zone is at 6.7 percent—anything below that is a disappointment that could boost selling in the market,” Limlingan said.

    Citisecurities Inc. vice president Lawrence Lee said: “The biggest problem is that long-term yields are rising in the US. That will put increased pressure in the short term on emerging markets.”

    “Weak earnings recently put us in a bad position. I would recommend [market would start]lightening up with prices potentially at 7,400,” Lee said.

    The financials counter was the lone gainer among the sectoral indices, while the property and mining and oil counters dropped by 1.50 percent and 1.37 percent, respectively.

    Total volume fell to 690.47 million shares, valued at P7.76 billion. Decliners outnumbered advancers 134 to 44, while 49 issues were unchanged.

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