PSEi tracks US marts, closes higher

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The country’s stock market defied the regional trend Monday, gaining nearly one percent as it tracked the US stock markets rather than its nearby peers, analyst said.

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The benchmark Philippine Stock Exchange Index (PSEi) advanced by 0.95 percent or 69.67 points to close the trading day at 7,376,41, while the wider All Shares improved by 0.83 percent or 34.69 points to end at 4,225.76.

Jonathan Latuja, equity research analyst at Unicapital Securities Inc. noted that the local bourse shook off the weakness seen in stock markets in the region.

“The PSEi was up by almost a percent, bucking the weakness in other Asian markets, still because of the Federal Reserve’s move to take a more dovish stance,” Latuja said.

Latuja pointed out that except for Shenzhen and Hong Kong, stocks in the region edged lower as these markets followed Japan’s drop by 1.25 percent last Friday.

“I believe the Philippines’ economic fundamentals remain intact. With the easing of interest rates by leading central banks such as Japan and ECB [European Central Bank], investors would come to us since we have one of the strongest stock markets in the region,” Latuja explained.

Despite the upbeat start on Monday, he said that the local bourse is anticipated to “dry up” in its remaining trading days during the week.

“Traders will go on vacation. Thus, even if investors want to buy or sell, they cannot do so without the traders. So they may opt to resume buying and selling next week,” he added.

Meanwhile, Luis Limlingan, head of research and sales at Regina Capital Development Corp., agreed with Latuja saying that the Philippines’ stock market tracked the US bourse’s performance.

“The Philippine stock market followed up the performance of the US markets for the shortened holiday as market continued to ride on the uptrend of the delayed rate hike and the reduction from four to two hikes within the year,” Limlingan said.

He further said that the US employment data and economy in the US continues to be supportive of the positive sentiment of equities investors.

Total value turn over was strong at P8.66 billion, with winners outnumbering losers, 104 to 79, and 35 issues remaining unchanged.

All the sub-indices ended with gains except for the mining and oil sector, which declined by 1.59 percent.

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