The Philippine stock market extended its rally for a second day on Wednesday, with local interest sustained after the successful conduct of the national elections.
The benchmark Philippine Stock Exchange Index (PSEi) jumped another 3.09 percent or 221.64 points to end at 7,396.52, while the broader All Shares increased by 2.72 percent or 116.07 points to close at 4,388.31.
Joseph Roxas, president of Eagle Equity Inc., explained that although most businessmen do not necessarily favor President-elect Rodrigo Duterte, local investors are, nonetheless, rejoicing just because the elections were generally peaceful.
“I think the choice of the new president is only secondary. It is more the success of the national elections, which was perceived by investors as clean, honest and peaceful,” Roxas said.
He noted that although Mar Roxas was more preferred by most businessmen and those who belonged to the A and B economic classes, the election results in favor of Duterte has pacified the masses, and therefore made the investors upbeat.
“The majority preferred Duterte, especially the masses who would have been more inclined to stage protest rallies in case he lost. So, the public in general are satisfied with the results,” he said.
Further, Roxas said that although Duterte is not an economist himself, businessmen and investors are optimistic that he would pick the right persons to form his economic team.
“The good thing about Duterte is that he acknowledges the fact that he is not an expert in economics. That recognition of weakness is a good thing since he would likely listen to the sound advice of people who are authorities in the [economic]matter, rather than pretending to be knowledgeable,” he added.
Market activity was markedly higher Wednesday, as total value turn over surged to P12.862 billion. Winners overwhelming losing stocks, 160 to 50, while 34 issues were unchanged.
As on Tuesday, all sub-indices again enjoyed gains, led by the property sector with a 3.65-percent increase, followed by financial firms with 3.14 percent.
Meanwhile, Victor Benavides, general manager of Alakor Securities Corp., attributed the stock market’s rally to the “Duterte effect.”
“The market initially thought he might still be the gung-ho president. But based on his latest interviews, he has adopted a new tone, which is very much presidential-like than we have witnessed earlier,” Benavides said.
Because of this, Benavides said stock market investors have recognized Duterte’s efforts to assume a new posture and more presidential demeanor, which is indicative of good governance.
“The market has gone done before because of uncertainty. The market went down quite significantly so it is just trying to recover what it lost during the campaign. So that is very much good for the market,” he said.
“To top it all the Makati Business Club has issued its statement of support to the incoming president,” Benavides added.