PSEi falls even as rest of Asia cheers Xi’s assurance

THE Philippine Stock Exchange on Tuesday ignored optimism across much of Asia in the face of China President Xi Jinping’s promise to open his country’s economy further, dropping further below the 8,000 mark for the second straight trading day as investors in local equities apparently nitpicked on negative developments in the economy.

The Philippine Stock Exchange index (PSEi) retreated for the second straight trading day by 10.98 points or 0.13% to close at 7,934.68 — there was no trading on Monday which was a public holiday — while the all-shares index dropped 11.03 points or 0.22% to end 4,817.47.

While noting that “some fund managers were not participating, as evidenced by the thinly traded volume” in the wake of “an extended break,” Luis A. Limlingan — Regina Capital Development Corp. managing director — noted via text that the Congressional Policy and Budget Research Department — the think tank of the House of Representatives — now expects the fiscal deficit to breach an official cap of 3% of gross domestic product, possibly hitting 4% and beyond from this year onward due to watered-down tax reform provisions. PSEi had returned below the 8,000 line last Friday after the government reported a 4.3% inflation rate for March that was the fastest in at least five years and pierced a 2-4% full-year target range for 2018.

Mr. Xi’s remarks at the Boao Forum for Asia on Tuesday — in which he vowed to cut import tariffs on products like cars — helped defuse escalating US-China trade tensions, in turn, helping fuel a rally for most of Asia. Japan’s Nikkei 225 and TOPIX index, Hong Kong’s Hang Seng Index, South Korea’s KOSPI Index, the Shanghai Composite Index, the Jakarta Composite Index and the MSCI AC Asia Pacific gained 0.54%, 0.35%, 1.65%, 0.27%, 1.67%, 1.26% and 0.69%, respectively.

At home, the six sectoral indices were equally divided between winners and losers, with sectors that gained consisting of industrials which added 61.91 points or 0.55% to finish 11,218.39; holding firms that increased by 10.33 points or 0.12% to 7,997.95; and property which edged up by 2.07 points or 0.05% to end 3,646.57.

Sectors that lost consisted of services that gave up 32.1 points or 1.93% to finish 1,628.33; mining and oil which dropped 151.95 points or 1.34% to 11,155.2; and financials which retreated by 6.78 points or 0.33% to close 2,017.63.

Tuesday’s list of 20 most active stocks was equally divided between those that gained and those that lost. Ayala Corp. gained 2.12% to P938.50 apiece and Jollibee Foods Corp. added 2.16% to P284 each, while Bloomberry Resorts Corp. gave up 2.96% to P13.10 apiece and Leisure & Resorts World Corp. erased 10.08% to P5.35 each.

Trading volume thinned to 1.70 billion shares worth P7.65 billion changing hands from Friday’s 2.37 billion worth P7.58 billion. Foreigners stayed largely bearish for a third straight trading day, though net selling slipped by 3.51% to P465.76 million from Friday’s P482.69 million. — with interview by