Equities 2 MIN READ

Shares drop on slower-than-expected GDP growth

August 11, 2023By BusinessWorld

Philippine stocks dropped anew on Thursday as slower-than-expected economic growth in the second quarter soured investor sentiment.

The Philippine Stock Exchange index (PSEi) fell by 80.79 points or 1.23% to close at 6,449.66 on Thursday, while the broader all shares index went down by 34.78 points or 0.99% to end at 3,445.38.

“The market fell after a surprisingly disappointing Philippine second quarter GDP (gross domestic product) print of 4.3%, which was far below consensus forecast of 6%. This raised investor concerns that full-year growth will fall below the government’s target of 6-7% and drag the performance of listed companies,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.

“The local equities market tumbled after the Philippine statistics office reported second quarter GDP results, which was much lower than consensus estimates. This is relevant considering that the Philippines has been highly regarded to deliver one of the highest growth for this year and 2024. The latest report can lead to adjustments in growth projections,” AB Capital Securities, Inc. Vice-President Jovis L. Vistan likewise said in a Viber message.

The Philippine economy grew by 4.3% in the second quarter, slower than the 6.4% expansion seen in the first quarter and the 7.5% in the same period a year ago, the Philippine Statistics Authority reported on Thursday.

The second quarter print fell below the 6% median estimate of 21 economists in a BusinessWorld poll conducted last week.

For the first half of the year, GDP growth averaged 5.3%, still below the government’s 6-7% goal for the year.

“That, coupled with the market bracing for an anticipated higher US CPI (consumer price index) data later today, spooked investors. Inflation concerns have resurfaced and can put pressure on CPI in the coming month,” Mr. Vistan added.

All sectoral indices declined on Thursday. Mining and oil plummeted by 315.71 points or 3.12% to 9,790.58; property dropped by 42.81 points or 1.56% to 2,699.68; services fell by 22.75 points or 1.43% to 1,567.95; industrials declined by 125.86 points or 1.37% to 9,010.62; holding firms went down by 78.25 points or 1.26% to 6,117.84; and financials lost 2.73 points or 0.14% to end at 1,912.91.

Value turnover went up to PHP 3.64 billion on Thursday with 513.68 million shares changing hands from the PHP 3.39 billion with 428.38 million issues seen on Wednesday.

Decliners outnumbered advancers, 107 versus 57, while 51 names closed unchanged.

Net foreign selling stood at PHP HP 268.5 million on Thursday versus the PHP 214.67 million in net buying recorded on Wednesday.

For Friday, Mr. Vistan placed the PSEi’s support at 6,400. — A.H. Halili

This article originally appeared on bworldonline.com

Read More Articles About: