Stocks rebounded Friday, after the Asian Development Bank upgraded its 2017 and 2018 growth forecasts for the Philippines in line with the improving economic prospects in the Asia-Pacific region.
The Philippine Stock Exchange index, the 30-company benchmark, jumped 85 points, or 1.1 percent, to close at 7,989.73 Friday, as all six major sectors advanced. The bellwether was also up 16.8 percent since the start of the year.
The heavier index, representing all shares, gained 32 points, or 0.7 percent, to settle at 4,771.64, on a value turnover of P7.9 billion. Losers outnumbered gainers, 121 to 82, while 53 issues were unchanged.
Thirteen of the 20 most active stocks ended in the green, led by Aboitiz Equity Ventures Inc. which went up 4.1 percent to P75.70 and SM Prime Holdings Inc. which gained 3.7 percent to P34.80. Ayala Corp. rose 2.9 percent to P880.
BDO Nomura Securities Inc., the joint venture company between BDO Unibank and Nomura Holdings of Japan that offers an online stock trading service, said it was expecting the benchmark index to hit the 8,500-point level over the next 12 months, as the Philippine economy is expected to sustain above-trend growth.
BDO Nomura head of research Dante Tinga Jr. said in a news briefing the prospects for the Philippine stock market would even get better with the passage of the tax reform program and the infrastructure rollout.
“Implementation of government plans for tax reform and infrastructure rollout are potential ‘game changers’. The market is closely tracking progress on both,” Tinga said.
“If the government is able to execute its infrastructure projects and tax reform programs, Philippine share prices would be re-rated upwards,” he said.
Tinga, however, said Philippine stocks continued to trade at a premium compared to regional peers. This makes the market vulnerable to profit taking.
Global equities have continued hitting fresh highs this week amid corporate results that have reinforced faith in earnings and the economy.
While it’s early in the US reporting season, some 83 percent of companies have topped estimates on the bottom line. Asian shares are up more than four percent in the past two weeks, with markets in Japan and Hong Kong near two-year highs.
Meanwhile, most Asian equity markets slipped into the red on Friday, with profit-taking also acting as a drag after a healthy July so far.
Tokyo ended down 0.2 percent, Hong Kong slipped 0.2 percent in the afternoon following a nine-day rally while Shanghai also closed 0.2 percent off.
Sydney eased 0.7 percent and Taipei shed 0.6 percent, while Manila and Jakarta also retreated. Seoul and Singapore rose, however.
But while the investigation continues to drag on market sentiment, upbeat earnings and a positive global economic outlook have kept investors broadly upbeat, with all three main New York indexes sitting around record highs.
In early European trade London rose 0.1 percent, Paris was flat and Frankfurt eased 0.2 percent. With AFP, Bloomberg