PHL stocks extend climb despite GDP contraction

PHILIPPINE SHARES continued to rise on Thursday despite government data showing the economy entered its first recession since 1991.

The bellwether Philippine Stock Exchange index (PSEi) gained 69 points or 1.18% to close at 5,902.58 on Thursday. The broader all shares index also increased 29.32 points or 0.84% to 3,485.61.

The market was unaffected by the release of gross domestic product (GDP) data in the morning, which showed Philippine GDP contracted 16.5% in the second quarter, worse than its 0.7% decline in the first quarter and reversing the 5.4% growth in the same period last year.

“I think that the negative GDP is already priced in for the PSEi, and investors are looking for cues for economic recovery once the (stricter lockdown) is lifted,” Philstocks Financial, Inc. Research Associate Piper Chaucer E. Tan said in a text message.

Metro Manila and key cities are under stricter quarantine measures again until Aug. 18 as President Rodrigo R. Duterte agreed to give healthcare workers a “time out” amid rising coronavirus disease 2019 (COVID-19) cases.

The Philippines is close to replacing Indonesia as the country with the most COVID-19 cases in Southeast Asia as local cases hit 115,980 on Wednesday, edging closer to Indonesia’s 116,871.

Aside from local catalysts, the PSEi was also affected by activities overseas as investors anticipated developments on a new US stimulus package.

“Sentiment was also boosted on expectations that a stimulus deal will be reached by this week,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.

The US Congress is currently discussing a new coronavirus stimulus package, which is eyed to support temporary unemployment benefits, a report by The Washington Post said.

US stocks advanced on Wednesday: the Dow Jones Industrial

Average, S&P 500 and Nasdaq Composite indices grew 1.39%, 0.64% and 0.52%, respectively. Most Asian stocks were treading in red territory on Thursday when the local market closed.

Five of six sectoral indices at the PSE ended the session with gains. Industrials rose 138.91 points or 1.84% to 7,673.06; holding firms accelerated 86.40 points or 1.44% to 6,067.16; services added 12.86 points or 0.92% to 1,397.36; property increased 23.62 points or 0.83% to 2,850.81; and financials climbed 4.17 points or 0.36% to 1,142.84.

Mining and oil was the sole declining index, losing 113.51 points or 1.96% to 5,673.12.

Value turnover stood at P6.53 billion with 7.27 billion issues switching hands, up from the previous day’s P5.38 billion with 2.04 billion issues.

Decliners beat advancers, 90 against 88, while 46 names ended unchanged.

Foreign investors snapped a seven-day selling streak, posting a net buying of P551.31 million on Thursday from the previous day’s P257.5-million net outflow.