PSEi down on profit taking after GDP, trade data

SHARES dropped on profit taking after the release of full-year 2022 Philippine gross domestic product (GDP) and trade data.

The benchmark Philippine Stock Exchange index (PSEi) went down by 38.66 points or 0.54% to close at 7,042.70 on Thursday, while the broader all shares index lost 9.87 points or 0.26% to end at 3,692.89.

“The PSEi inched down on Thursday amid profit taking as investors widely expect the strong fourth-quarter and full-year 2022 Philippines’ GDP performance. On a positive note, the robust Philippine GDP growth report supports the sideways movement of the PSEi just above the 7,000 level,” Unicapital Securities, Inc. Equity Research Analyst Neil Andrew L. Maderaje said in a Viber message.

The economy expanded by 7.6% in 2022 amid robust domestic demand despite rising inflation, preliminary data from the Philippine Statistics Authority showed.

This exceeded the government’s 6.5-7.5% target for the year and was faster than the 5.7% GDP growth in 2021.

This was also slightly better than the 7.5% median estimate of 23 economists in a BusinessWorld poll last week.

In the fourth quarter alone, GDP expanded by 7.2%, slower than the 7.6% in the third quarter and 7.8% in the same period a year earlier.

Investors were also waiting for more catalysts, such as the US Federal Reserve’s policy meeting next week and the start of the corporate earnings season next month, Mr. Maderaje said.

“The local market inched down this Thursday as investors worried over the decline in the Philippines’ exports last December 2022, which somehow reflects the challenging global economic environment due to several headwinds offshore such as the ongoing Russia-Ukraine war, China’s economic slowdown and the tight monetary policy in the US,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message.

The value of merchandise exports contracted by 9.7% year-on-year to USD 5.67 billion in December 2022 versus the 7.3% growth in the same month in 2021 and the 13.2% expansion recorded in November last year.

All sectoral indices closed lower on Thursday. Services declined by 29.51 points or 1.64% to 1,764.61; mining and oil lost 79.75 points or 0.68% to end at 11,516.64; industrials dropped 61.77 points or 0.62% to 9,883.77; holding firms went down by 20.02 points or 0.29% to 6,864.51; financials retreated by 4.74 points or 0.26% to 1,806.47; and property decreased by 4.07 points or 0.13% to 3,116.19.

Value turnover went down to P5.11 billion on Thursday with 1.34 billion shares changing hands from the P5.75 billion with 1.86 billion issues traded on Wednesday.

Advancers outnumbered decliners, 107 versus 99, while 49 names closed unchanged.

Net foreign buying climbed to PHP 519.19 million on Thursday from PHP 237.29 million the previous trading day.

Unicapital Securities’ Mr. Maderaje said they see the PSEi’s strong support at 6,900. — J.I.D. Tabile