Philippine shares rallied for a third day on Wednesday as optimism about the strengthening US economy spilled over to the Asian markets, largely dispelling concerns over the likelihood of a rate hike by the Federal Reserve.
The benchmark Philippine Stock Exchange Index (PSEi) advanced by 1.46 percent or 107.23 points to close at 7,463.95, while the broader All Shares rose by 1.02 percent or 45.20 points to end the trading day at 4,457.31.
Jonathan Latuja, equity research analyst at Unicapital Securities Inc. said that the main index was boosted by the strengthening economy of the US, which also pushed most Asian markets higher.
“The stock market rallied for a third day as optimism in the US regarding the strength of its economy spilled over to Asian markets and overshadowed Fed rate hike concerns,” Latuja said.
He also suggested that the positive performance of the local bourse might also be attributed to the increase in oil prices with the expectations of lower petroleum supplies.
Meanwhile, Luis Limlingan, business development head at Regina Capital Development Corp., concurred with Latuja, adding that despite the looming Fed rate hike investors are optimistic that such move would not have an adverse effect on the US economy.
“The US economic data suggested that despite the possibility of a rate hike, perhaps 40
percent chance of a rate hike, the US economy would still perform fairly well,” Limlingan said.
On the macroeconomic front, Limlingan said that with a 6.9-percent gross domestic growth rate during the first quarter of the year, the Philippines’ economic fundamentals remain strong, thus making investors optimistic with regard to their respective positions in the equity market.
With regard to the country’s forthcoming change of administration, Limlingan said that although presumptive President Rodrigo Duterte’s recent actuations and pronouncements have spurred concerns in the market, investors have still “a five-week window to revisit their respective positions.”
All the subindices recorded gains except for mining and oil sector, which fell by almost a percent on higher petroleum prices, while the property sector enjoyed the highest increase at 2.33 percent.
Total value turnover was average at P7.6 billion, with winners prevailing over losers, 112 to 84, while 39 issues were unchanged.