PSEi up over 2% on bargain hunting, PMI data

Philippine shares surged on Tuesday as investors took advantage of lower prices following last week’s decline and with improved activity in the manufacturing sector in August lifting the market’s mood.

The Philippine Stock Exchange index (PSEi) jumped by 2.31% or 137.56 points to close at 6,093.89, while the broader all shares index rose 1.33% or 44.20 points to end the session at 3,363.19.

This was the PSEi’s best one-day performance since June 15, when it gained 6.14% or 362.82 points to end at 6,272.88.

The main stock benchmark traded higher than Friday’s 5,956.33 close the entire day, opening Tuesday’s session at 6,122.32 and hitting a high of 6,148.90. Its intraday low was at 6,057.85.

“The local market jumped more than 2% on Tuesday as bargain hunting kicked in following last week’s sharp sell-off… However, market gains remained selective, with more index members still ending in negative territory, as peso weakness and renewed geopolitical tensions continued to weigh on sentiment,” COL Financial Group Research Analyst Denise Joaquin said in a Viber message.

“The local index closed higher following strong buying pressure after the recent selling last week. Market participants took advantage of attractive valuations, particularly among blue-chip stocks, supporting the broad-based recovery. Sentiment was further lifted by the S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI), which rose to 54.9 in August from 51.8 in July, marking its fourth consecutive month of expansion,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

The August manufacturing PMI, which came amid increased output and new export orders, was the highest since December 2016’s 55.7.  A PMI reading below 50 shows a deterioration in operating conditions from the previous month, while a reading above 50 signals an improvement.

Sectoral indices ended mixed on Tuesday. Services surged by 5.45% or 170.52 points to 3,301.60; financials increased by 3.26% or 60.87 points to 1,925.34; and holding firms went up by 0.26% or 11.24 points to 4,341.39.

Meanwhile, mining and oil declined by 1.2% or 240.13 points to 19,829.75; industrial dropped by 1.1% or 87 points to 7,818.63; and property went down by 0.08% or 1.49 points to 1,865.50.

Advancers beat decliners, 106 to 88, while 64 names were unchanged.

“ICT (International Container Terminal Services, Inc.) led the gains, closing 7.34% higher, followed by BPI (Bank of the Philippine Islands (+5.5%), and BDO (BDO Unibank, Inc.) (+4.83%),” Ms. Joaquin said.

Value turnover fell to PHP 10.47 billion on Tuesday with 1.88 billion shares traded from the PHP 18.81 billion with 2.22 billion issues that changed hands on Friday.

Net foreign selling decreased to PHP 92.52 million from PHP 3.51 billion previously. — Alexandria Grace C. Magno