Local shares rise on positive economic outlook

Philippine shares rose on Tuesday amid an improved economic outlook and as investors anticipate a year-end window dressing.

The benchmark Philippine Stock Exchange index (PSEi) went up by 45.77 points or 0.7% to end at 6,521.27 on Tuesday, while the broader all shares index climbed by 16.57 points or 0.48% to close at 3,432.71.

“Investors digested positive economic narratives today including the International Monetary Fund’s sound assessment of the Philippines fiscal consolidation, and the Philippine Economic Zone Authority’s positive outlook on its investment approvals for full year 2023,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message.

The International Monetary Fund said in a Dec. 15 statement that the Bangko Sentral ng Pilipinas (BSP) should keep interest rates higher for longer until inflation fully returns to target.

The Monetary Board last week kept rates steady at a 16-year high of 6.5% for a second straight meeting, after a 25-basis-point (bp) off-cycle hike on Oct. 26.   

The BSP raised borrowing costs by a total of 450 bps from May 2022 to October 2023.

Mercantile Securities Corp. Head Trader Jeff Radley C. See said the market continued its rally as investors are bullish for next year.

“Looks like we are experiencing a Christmas rally,” Mr. See said in a Viber message, adding that investors are bullish on hopes of a rate cut next year.

Jayniel Carl S. Manuel, an equities trader at Seedbox Securities, Inc., said in an e-mail that the index’s recent uptick was due to “the phenomenon of year-end window dressing.”

“Additionally, we have observed an influx of investor cash into the market, further contributing to the upward momentum. As the fiscal year concludes, investors are strategically allocating extra funds, taking advantage of market opportunities and positioning themselves for potential year-end gains,” Mr. Manuel said.

Most of the sectoral indices rose on Tuesday. Financials went up by 33.04 or 1.93% to 1,738.24; property gained 25.53 points or 0.89% to 2,886.32; services increased by 12.67 points or 0.8% to 1,595.20; industrials jumped by 5.11 points or 0.05% to 8,883.39.

Meanwhile, mining and oil declined by 40.71 points or 0.42% to 9,494.28; and holding firms decreased by 6.97 points or 0.11% to 6,352.92.

Value turnover went down to PHP 4.37 billion on Monday with 748.67 million issues changing hands from the PHP 5.4 billion with 602.65 million shares on Monday.

Decliners outnumbered advancers, 96 against 88, while 47 names ended unchanged.

Net foreign buying declined to PHP 394.99 million on Tuesday from PHP 625.25 million on Monday. — By Sheldeen Joy Talavera