Stocks rose Thursday on improving growth prospects after Finance Secretary Carlos Dominguez III said he expects the gross domestic product to expand beyond 6 percent this year following the resolution of the budget impasse.
The Philippine Stock Exchange Index gained 44.07 points, or 0.6 percent, to 8,057.64 on a value turnover of P8.4 billion. Gainers beat losers, 115 to 86, with 48 issues unchanged.
“Even though the 5.6-percent GDP growth in the first quarter was lower than expected, now the national budget for 2019 has been enacted, the DoF continues to expect GDP growth to surpass 6 percent by the end of the year,” Dominguez said in a recent discussion with representatives of the Oxford Business Group.
First Gen Corp. of the Lopez Group climbed 3.6 percent to P27.05, while Manila Electric Co., the biggest retailer of electricity, rose 1.6 percent to P387.
SM Investments Corp. of the Sy Group advanced 2.6 percent to P975, while International Container Terminal Services Inc., the largest port operator, added 1.7 percent to P146.90.
The rest of Asian markets rose Thursday as investors brushed off Donald Trump’s latest dig at China and threat to impose more tariffs on the country’s goods if crunch talks with Xi Jinping fail this weekend.
Hong Kong added 1.4 percent, Shanghai jumped 0.7 percent and Tokyo ended up 1.2 percent.
Sydney was 0.4 percent higher, Singapore rose 0.7 percent, Seoul put on 0.6 percent and Taipei jumped 1.1 percent. Wellington, Mumbai and Jakarta also rose.
Before setting off for the G20 summit in Japan, the president said in an interview that he had a “Plan B” in case the face-to-face talks show no progress, adding he would “take in billions and billions of dollars a month and we’ll do less and less business with them.”
He said Xi wanted to make a deal as “China’s economy is going down the tubes.”
His remarks on Fox Business Network came soon after Treasury Secretary Steven Mnuchin said the two sides were “90 percent” of the way to an agreement when talks broke down last month, with the US blaming Beijing for backsliding.
Still, observers said traders were taking the latest developments with a pinch of salt.
“The market is unreactive to these types of headlines given that Trump has continued to adopt a ‘good cop/bad cop’ strategy with… Mnuchin,” said Stephen Innes at Vanguard Markets.
“Instead, market participants are content to wait for Saturday’s meeting to unfold where the proof will be in the pudding.
“A harmonious photo op could go a long way to soothing investors’ concerns at the market open on Monday.”
However, while there is optimism for an eventual agreement, analysts say they are not expecting anything major to come out of the Osaka meeting.
OANDA senior market analyst Alfonso Esparza said: “The G20 is looking to be a disappointment to investors looking for a blockbuster trade deal to be announced and is now expected to yield a new round of talks between the US and China to be held later this year.”
And Eli Lee, head of investment strategy at Bank of Singapore, added: “Our baseline scenario is that both sides will commit to re-engage in trade negotiations while Trump puts the final round of tariffs on hold for a few months.” With AFP
