Shares extend climb on positive economic outlook
STOCKS went up on Thursday as the government said they remain bullish that they can reach this year’s economic growth goal despite the inflation risks caused by the Russia-Ukraine war and following the US Federal Reserve’s rate hike.
The benchmark Philippine Stock Exchange index (PSEi) climbed by 96 points or 1.36% to close at 7,122.45 on Thursday, while the broader all shares went up by 46.28 points or 1.24% to 3,759.96.
“[T]he National Economic and Development Authority (NEDA) said the country is still on track to reach its economic growth target this year despite the impact of Russia’s invasion of Ukraine on prices,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
“Philippines shares continued to rebound after the Fed raised its benchmark interest rates by 0.25% for the first time since 2018. The central bank hinted at six more rate hikes this year as it forecasted a consensus funds rate of 1.9% by end of year,” Mr. Limlingan added.
The NEDA is confident the Philippines could still reach its economic growth target this year, despite the impact of Russia’s invasion of Ukraine on prices, Socioeconomic Planning Secretary Karl Kendrick T. Chua said at a Tuesday briefing.
Meanwhile, the Fed on Wednesday raised interest rates for the first time since 2018 and laid out an aggressive plan to push borrowing costs to restrictive levels next year in a pivot from battling the coronavirus pandemic to countering the economic risks posed by excessive inflation and the war in Ukraine, Reuters reported.
The US central bank’s Federal Open Market Committee kicked off the move to tighten monetary policy with a quarter-percentage-point increase in the target federal funds rate, lifting that key benchmark from the current near-zero level in a step that will ripple through a variety of other rates charged to consumers and businesses.
“[The PSEi] was up most likely due to strong performance of the US market last night and Asian markets today. Also, commodity prices are correcting after climbing significantly last week,” COL Financial Group First Vice-President April Lynn C. Lee-Tan said in a Viber message on Thursday.
Majority of the PSE’s sectoral indices ended in the green except for mining and oil, which fell by 157.19 points or 1.30% to 11,916.61.
Meanwhile, financials climbed 55.01 points or 3.39% to 1,677.86; services rose by 34.93 points or 1.90% to 1,870.38; property increased by 43.67 points or 1.31% to 3,369.19; holding firms improved by 43.10 points or 0.63% to 6,809.39; and industrials gained 49.99 points or 0.52% to 9,647.92.
Value turnover decreased to P7.50 billion with 1.43 billion shares changing hands from the P7.76 billion with 1.32 billion issues seen the previous trading day.
Advancers outnumbered decliners, 123 versus 62, while 49 names closed unchanged.
Net foreign buying increased to P158.04 million on Thursday from P23.87 million on Wednesday. — L.M.J.C. Jocson with Reuters
