PSEi closes above 6,300 on easing restrictions, end of budget deadlock

23-Oct-2020 Intellasia | AFP | 6:02 AM Print This Post

Philippine equities continued to zoom past the 6,000-level on Thursday, defying a regional downturn as easing coronavirus restrictions and deliberations on the 2021 national budget fuel investor optimism.

Local shares sustained a rally for the fourth straight day, sending the Philippine Stock Exchange index (PSEi) up 1.05 percent to close at 6,344.63. The broader all shares index also climbed but by a smaller 0.74 percent to 3,788.75.

Broken down, the property sub-index, which jumped 2.73%, led the pack of gainers followed by industrial (1.50%), holding firms (0.98%) and mining and oil (0.64%). On the flip side, financial companies retreated 0.83 percent while services firms dipped 0.42%.

“Investor sentiment has been pretty positive since the start of the week, partly boosted by the House approving the 2021 national budget. Curfew hours were also shortened in Metro Manila,” Anna Corenne Agravio, equity analyst at Manila-based brokerage Regina Capital, said in a Viber message.

After sorting out a leadership row that nearly derailed the passage of the proposed spending plan, the House of Representatives last Friday approved the record P4.5 trillion outlay for next year, crafted to ensure funds are available for the government’s pandemic response in 2021.

The Lower House’s approval would make sure the Duterte administration’s recovery plan would stay on track. Also to speed up the economic rebound, the government had shortened curfew hours in Metro Manila to just 12 midnight to 4 a.m., while allowing people aged 18-65 years old to leave their homes.

“People are probably starting to turn more optimistic on our economic recovery because of these factors and are thus pushing up the market,” Agravio said.

Despite the optimism, decliners trumped advancers at market close, 112 against 100, while 43 names were unchanged. A total of 1.28 billion local shares, valued at P9.81 billion switched hands during the trading day.

As it is, the main index has gained more than 400 points since the rally started. For Agravio, “volatility is pretty high” at this point.

“There are more major resistance levels at 6,400 and 6,500 that could prove as significant speedbumps should the rally continue,” she said. “The most we could hope for is that if the rally ends, the PSEi will start to consolidate sideways instead of breaking down.”

Elsewhere, Asian markets mostly fell Thursday as chances of a pre-election stimulus package from Washington dimmed, while investors were also spooked by warnings from US officials that Russia and Iran had tried to interfere in the vote.

Tokyo dropped 0.7%, Sydney and Mumbai each fell 0.3%, and Shanghai shed 0.4%. Seoul, Singapore, Jakarta and Wellington were also well in the red.

Hong Kong, Taipei and Bangkok joined Manila in bucking a bearish mood in the region.


Category: Philippines

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