The stock market retreated on Wednesday as investors reacted to news of weaker overseas Filipino worker (OFW) remittances.
The bellwether Philippine Stock Exchange index (PSEi) lost 1.27 percent or 106.2 points to close at 8,276.64 while the wider All Shares dropped 1.01 percent or 49.76 points to settle at 4,864.15
“[The market reacted to the news on] overseas [cash]remittances, which went down by 8.3 percent to $2.19 billion. The estimate was [it would be]up 7.4 percent,” an analyst from Regina Capital Development Corp. said.
Personal remittances—which include cash remittances or money sent home via banks—dropped by a larger 7 percent to $2.44. Year to date, however, OFW remittances were up 4.8 percent to $23.16 billion.
The Regina Capital analyst also noted pressure for an improved third quarter economic growth after the government revised the second quarter figure to 6.7 percent from 6.5 percent.
“Net primary income from the rest of the world had a downward revision of 7 percent from 8.6 percent. Gross National Income (GNI) was maintained at 6.8 percent. So there may be more pressure for third quarter gross domestic product when it is released,” the analyst.
The revision means second quarter growth was even better than the first quarter’s 6.4 percent and had fallen within the government’s 6.5-7.5 percent target for 2017. The first semester result also improved to 6.6 percent from 6.4 percent.
Ed Francisco, president of BDO Capital and Investments Corp., said the market’s performance remained good.
“That’s okay. [There was a] holiday so volume [was]lighter. It should rebound next week,” Francisco said.
COL Financial research head April Tan said the market “was just correcting in general after doing quite up significantly.”
“This is partly influenced by the weak performance of other global markets,” she added.
All subsectors ended Wednesday in the red, with mining and oil leading with 2.12-percent decline.
More than 1 billion issues were traded valued at P5.9 billion.
Losers led winners, 109 to 76, while 53 issues were unchanged.