PSEi rises after China’s credit rating downgrade

SHARES continued to climb yesterday despite the current unrest in the southern Philippines, as traders favored the Philippine market following Moody Investors Service’s downgrade of China’s credit rating.

The bellwether Philippine Stock Exchange index ( PSEi) added 25.68 points or 0.32% to close at 7,837.82.

The all-shares index likewise increased by 9.33 points or 0.20% to end at 4,671.49.

“The sudden declaration of martial law in Mindanao did not spook investors, with the index closing in the green with sentiment buoyed by US stocks closing narrowly higher and the S&P 500 logging its first four-day winning streak since mid-February on the back of strength across the financials,” Luis A. Limlingan, managing director at Regina Capital Development Corp., said yesterday.

President Rodrigo R. Duterte on Tuesday night placed the entire island of Mindanao under martial law as security forces clashed in Marawi City, Lanao del Sur with suspected members of the so-called Maute terror group led by Isnilon Hapilon that has aligned itself with the Islamic State.

“Other investors [also] viewed the Philippines as much safer bet versus China’s downgrade,” Mr. Limlingan added. Moody’s downgraded Beijing’s long-term local and foreign currency issuer ratings, citing expectations that the financial strength of the world’s second- biggest economy would erode over the coming years.

Aniceto K. Pangan, equities trader at Diversified Securities, Inc., said in a phone interview that despite martial law “jitters,” local stocks still ended higher as China’s downgrade became “more advantageous” for the Philippine market.

“Market continued its positive direction as China’s downgrade meant the low interest rates and stimulus will persist — thus, more advantageous for emerging markets like us,” Mr. Pangan said.

Summit Securities, Inc. President Harry G. Liu said the martial law declaration did not temper positive sentiment of the market. “President Duterte has a high trust rating from the people. I think investors feel Duterte is in control,” he said.

Sectoral indices were mixed. Industrials rose 1.16% or 128.91 points to 11,221.47; property climbed 0.90% or 32.04 points to 3,578.85; and financials went up 0.21% or 4.08 points to 1,935.40.

In contrast, mining and oil went down 0.69% or 88.37 points to 12,621.99; services dropped 0.35% or 5.77 points to 1,614.51; and holding firms slipped 0.19% or 15.23 points to 7,939.94.

Value turnover dropped to P5.90 billion yesterday from Tuesday’s P7.41 billion, with 1.05 billion shares changing hands.

Foreign investors remained net buyers with P451.81 million, up from the previous session’s net purchases worth P146.71 million.

Decliners outpaced advancers, 97 to 94, while 45 names closed unchanged.

For today, Mr. Limlingan said “markets will be taking cues from the FOMC (Federal Open Market Committee) minutes.” •