SHARES rose on Tuesday on improved sentiment after the Asian Development Bank (ADB) upgraded its growth outlook for the country.
The benchmark Philippine Stock Exchange index (PSEi) increased by 44.38 points or 0.61% to close at 7,241.99 on Tuesday, while the broader all shares index went up by 8.90 points or 0.23% to 3,841.69.
“Market continued its uptrend today after ADB raised its growth outlook on the Philippines as it remains on a steady growth path attributed to the vaccination program and declining coronavirus disease 2019 (COVID-19) cases in the country,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message on Tuesday.
The ADB raised its growth forecasts for the Philippines for this year and next as increased coronavirus vaccinations are expected to support the economy.
The Asian Development Outlook 2021 says gross domestic product (GDP) will likely grow by 5.1% this year and by 6% in 2022, higher than its forecasts of 3.5% for 2021 and 5.5% for next year given in September.
If realized, a 5.1% GDP growth this year would be better than the steep 9.6% slump in 2020 but still lower than the pre-pandemic 6.1% expansion in 2019.
“Investors continued to bet on more economic reopening early next year as the COVID-19 weekly average continued to fall,” Papa Securities Corp. Equities Strategist Manny P. Cruz said in a Viber message.
The Department of Health recorded additional 235 COVID-19 cases on Tuesday, bringing the total number of infections to 2,836,868.
“In addition, the passage of the validity extension of the 2021 national budget spurred optimism as well,” Philstocks Financial, Inc. Research and Engagement Officer Claire T. Alviar said in a Viber message.
On Monday, senators approved on third and final reading the extension of the P4.5-trillion national budget for this year, which is set to expire by the end of this month, until Dec. 31, 2022.
Sectoral indices closed in the red on Tuesday except for holding firms, which gained 104.36 points or 1.50% to end at 7,042.39, and financials, which went up by 21.22 points or 1.32% to 1,628.68.
On the other hand, services dropped 10.07 points or 0.50% to close at 1,973.95; mining and oil declined 36.74 points or 0.39% to 9,222.89; industrials fell 39.68 points or 0.38% to 10,335.24; and property lost 7.23 points or 0.22% to end at 3,260.91.
Value turnover increased to P7.6 billion with 1.33 billion issues switching hands on Tuesday from the P6.66 billion with 1.64 billion shares traded on Monday.
Decliners beat advancers, 97 against 85, while 55 closed unchanged.
Net foreign buying increased to P457.94 million from the P60.07 million logged in the previous trading day.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the PSEi’s immediate resistance for this week is at the 7,260-7,270 levels. — M.C. Lucenio