PSEi advances after positive factory output data
PHILIPPINE shares climbed on Tuesday as positive April factory output data helped offset a report showing unemployment rose that same month and the World Bank’s lower economic growth forecast for the country.
The 30-member Philippine Stock Exchange index (PSEi) gained 45.80 points or 0.67% to close at 6,809.72 on Tuesday, while the all shares index went up by 17.51 points or 0.42% to end at 4,117.13.
“The PSEi inched higher despite the disappointing jobs data as well as reports that the World Bank, yet again, reduced its economic growth forecast on the Philippines,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said via e-mail.
“The increase in unemployment had almost no effect on the market as this is a temporary issue and was already expected and factored into valuations,” Mr. Mangun said, adding investors are still optimistic.
Data from the Philippine Statistics Authority (PSA) showed the country’s unemployment rate went up to 8.7% in April 2021, higher than the 7.1% recorded in the previous month.
Meanwhile, the World Bank cut its gross domestic product (GDP) growth forecast for the Philippine economy this year to 4.7% from its 5.5% estimate in March due to the reimposition of lockdowns following the renewed surge in coronavirus cases in the country.
“The local vaccination [drive] picking up speed and vaccine supply improving seem to be the focus of investors… [which] definitely raise hopes for [the] eventual reopening of the economy and greater GDP growth prospects,” First Metro Investment Corp. Head of Research Cristina S. Ulang said in a Viber message.
Diversified Securities, Inc. Equity Trader Aniceto K. Pangan added in a text message that factory output data released on Tuesday also boosted sentiment.
Preliminary results of the PSA’s latest Monthly Integrated Survey of Selected Industries showed factory output, as measured by the volume of production index, surged by 162.1% year on year in April.
Majority of sectoral indices posted gains on Tuesday except for mining and oil, which dropped by 16.51 points or 0.17% to 9,488.68.
Meanwhile, property improved by 32.69 points or 0.98% to 3,361.61; holding firms gained 61.85 points or 0.9% to 6,881.54; services increased by 4.10 points or 0.26% to 1,529.89; industrials rose by 19.57 points or 0.21% to close at 9,118.29; and financials inched up by 1.52 points or 0.1% to finish at 1,446.57.
Value turnover increased to P5.29 billion with 2.37 billion shares switching hands on Tuesday, from the P4.19 billion with 1.86 billion issues traded the previous day.
Advancers outnumbered decliners, 110 versus 93, while 49 names closed unchanged.
Foreigners turned buyers anew with P29.01 million in net purchases on Tuesday against the P96.13 million in net outflows seen on Monday.
“With… the rise in infection rates, we may see sideways movement with major support at 6,600 while major resistance at 6,900,” Mr. Pangan said. — K.C.G. Valmonte