Shares up on expectations of slower June inflation

LOCAL SHARES closed higher on Monday amid expectations that inflation eased further last month.

The Philippine Stock Exchange index (PSEi) rose by 40.14 points or 0.62% to end at 6,508.21 on Monday, while the broader all shares index went up by 14.46 points or 0.41% to close at 3,467.42.

“The local bourse gained by 40.14 points (0.62%) to 6,508.21, driven by the anticipation of slower headline inflation in June. The positive cues from overseas, particularly in Asia, where most markets were trading in the green, further influenced the sentiment at home. Investors were particularly focused on digesting the manufacturing PMI (purchasing managers’ index) data, especially in China,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.

“The index started the second half of the trading year in the green, climbing more than 40 points on market-on-close buying to end the session just above the 6,500 level. Investors took their cue from analysts’ estimates that Philippine June inflation will further decelerate to 5.5%,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet likewise said in a Viber message.

Mr. Colet however noted that trading volume was weak as investors remained on the sidelines ahead of the data release.

Value turnover fell to P2.45 billion on Monday with 1.54 billion shares changing hands from the P4.73 billion with 784 million issues traded on Friday.

A BusinessWorld poll of 17 analysts yielded a median estimate of 5.5% for June inflation, within the 5.3% to 6.1% forecast given by the Bangko Sentral ng Pilipinas (BSP) on Friday.

If realized, the median estimate will be slower than the 6.1% print in May 2023 and June 2022. It would also be the slowest since the 5.4% in May 2022.

June would mark the fifth consecutive month of slower inflation, and the 15th straight month that inflation surpassed the BSP’s 2-4% target range.

The Philippine Statistics Authority will report June consumer price index data on Wednesday.

Meanwhile, China’s factory activity slowed in June as the Caixin manufacturing survey showed a dip to 50.5, from 50.9 in May, Reuters reported. That slightly beat market forecasts of 50.2.

Most sectoral indices went up on Monday, except for industrials, which declined by 74.77 points or 0.81% to 9,153.23, and services, which fell by 3.23 points or 0.2% to 1,561.95.

Meanwhile, property increased by 46.56 points or 1.78% to 2,654.57; holding firms climbed by 52.61 points or 0.82% to 6,439.15; mining and oil gained 59.47 points or 0.6% to end at 9,969.16; and financials rose by 8.99 points or 0.48% to 1,856.12.

Advancers slightly outnumbered decliners, 98 versus 91, while 45 names closed unchanged.

Net foreign buying stood at P222.3 million on Monday versus the P271.77 million in net selling recorded on Friday. — A.H. Halili with Reuters