Factory reading, inflation fears weigh on bourse

LOCAL SHARE PRICES extended their decline on Thursday, keeping pace with some peers in the region in the face of a subdued monthly factory reading and the specter of beyond-target inflation in February.

The Philippine Stock Exchange index (PSEi) gave up 0.11% or 9.52 points to close at 8,465.77, while the all- shares index also lost 0.10% or 5.31 points to 5,077.63.

“Philippine shares still sustained losses, albeit at a smaller pace compared to Wednesday’s selldown…” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile phone message.

“It didn’t help that the Philippine PMI went down to 50.8, which is 90 basis points lower than last month’s 51.7 and last year’s 53,” he added, referring to the February Nikkei Philippines Manufacturing Purchasing Managers’ Index (PMI) that matched September 2017’s reading that was the second-lowest since the country survey began in January 2016.

Another analyst blamed expectations of even faster inflation in February, to be reported on Tuesday next week, which the Bangko Sentral ng Pilipinas (BSP) expects at 4-4.8%, potentially the fastest in more than three years, piercing BSP’s 2-4% target range and 4.3% forecast average for fullyear 2018.

“Optimism doesn’t look good in these early days of March, especially with February inflation results just around the corner next March 6, Tuesday,” Papa Securities Corp. trader Gabriel F. Perez said in an e-mail.

Some other Asian bourses joined in Wall Street’s sell- off, with Japan’s Nikkei Stock Average 225 and Topix Index, South Korea’s KOSPI and the Straits Times Index losing 1.56%, 1.59%, 1.17% and 0.48%, respectively, while Hong Kong’s Hang Seng Index and the Shanghai Composite Index edged up 0.65% and 0.44%, respectively.

Locally, two sectoral indices rose, with property picking up 1.54% or 57.65 points to end 3,779.35 and services edging up 0.09% or 1.68 points to 1,747.57.

The rest declined: mining and oil by 1.82% or 223.76 points to 12,030.06; financials by 1.04% or 23.25 points to 2,202.40; holding firms by 0.45% or 38.66 points to 8,546.40; and industrials by 0.03% or 3.44 points to 11,437.47.

Some 6.90 billion shares worth P7.56 billion changed hands, from Wednesday’s 16.91 billion issues worth P9.97 billion.

Foreigners remained predominantly bearish for the eighth straight trading day, with net selling down 40.67% to P557.18 million from Wednesday’s P939.04 million.

The list of the day’s 20 most active stocks showed seven that gained led by Easycall Communications Philippines, Inc.; Now Corp.; SM Investments Corp. and Ayala Land, Inc. that rose 10.05% to P52, 2.92% to P13.40, 2.77% to P966 and by 2.68% to P42.20, respectively. Those that weighed on the bourse included JG Summit Holdings, Inc., whose price dropped 5.42% to close P68.10.