Stocks up on peso’s rise before key data releases

PHILIPPINE SHARES climbed on Monday after the peso closed at the P55-per-dollar level for the first time in three months and as the market awaits the release of inflation and gross domestic product (GDP) data this week.

The Philippine Stock Exchange index (PSEi) went up by 88.76 points or 1.48% to close at 6,078.03 on Monday, while the broader all shares index rose by 29.10 points or 0.89% to end at 3,292.15.

“The PSEi has risen for the third consecutive time as the peso strengthened against the dollar, now trading below the P56 level. This is driven by diminishing expectations of another US Federal Reserve rate hike following last week’s rate pause,” Unicapital Securities, Inc. Senior Equity Research Analyst Carlos Angelo O. Temporal said.

The peso closed at P55.91 a dollar on Monday, rising by 19 centavos from Friday’s P56.10 finish, data from the Bankers Association of the Philippines’ website showed.

This was the peso’s best close in more than three months or since it finished at P55.74 on Aug. 4.

“Following the holiday break last week, the local bourse surged… due to the strong Philippine manufacturing PMI (purchasing managers’ index) data and a drop in US long-term Treasury yields,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.

“Upcoming economic data releases including but not limited to inflation rate and GDP growth rate, which are both expected to be better than the previous report helped lift the market,” Ms. Alviar added.

The Philippine Statistics Authority will release October inflation data on Tuesday and the third-quarter GDP report on Thursday.

A BusinessWorld poll of 13 analysts yielded a median estimate of 5.7% for October headline inflation, within the 5.1-5.9% forecast of the Bangko Sentral ng Pilipinas.

Meanwhile, a separate poll of 17 economists and analysts last week yielded a median estimate of 4.9% for third quarter GDP growth, faster than the preliminary 4.3% expansion recorded in the second quarter.

If realized, this would bring the nine-month GDP growth average to 5.2%, still below the government’s 6-7% full-year target.

Almost all sectoral indices went up on Monday, except for industrials, which declined by 2.50 points or 0.02% to 8,495.78.

Holding firms climbed by 126.43 points or 2.2% to 5,853.91; property went up by 43.68 points or 1.71% to 2,590.31; financials rose by 17.55 points or 1.03% to 1,721.71; services increased by 13.72 points or 0.92% to 1,490.66; and mining and oil added 87.12 points or 0.88% to end at 9,894.27.

Value turnover went up to P4.02 billion on Monday with 323.74 million shares changing hands from the P3.76 billion with 301.35 million issues seen on Friday.

Advancers narrowly outnumbered decliners, 87 versus 86, while 51 shares closed unchanged.

Net foreign selling went down to P172.65 million on Monday from P506.65 million on Friday. — S.J. Talavera