Financial sector to continue momentum

The financial sector is not expected to lose its positive momentum in the stock market anytime soon as institutions have kept their bets on banking stocks while the market is seen to continue moving upward in the next few days.

First Metro Investment Corp. (FMIC) said in its latest Market Call Research that the financial sector continuous to perform well in the past months.

"The financial sector grew yet again by 1 percent in August. Security Bank Corporation (SECB) led the sector with a significant increase of 6.8 percent after its net income soared by 32 percent year-on-year (y-o-y) in the second quarter of 2017 to reach R2.4 billion. Net interest income’s surge (+25 percent y-o-y) drove this, supported by a huge jump in its loan portfolio (+27 percent yo-y)," FMIC said.

It also highlighted Bank of the Philippine Islands’ (BPI) earnings performance, which rose by 17 percent y-o-y in the second quarter due to significant gains of its non-interest income which grew by 21 percent y-o-y.

As for BDO Unibank, Inc. (BDO), FMIC said the company eased up to 1 percent growth from the 1.5 percent increase in the previous month.

As the market approaches fourth quarter, stocks will likely benefit from the seasonal spending kick at the latter part of the year.

The Philippine Stock Exchange index (PSEi) remained as one of the fastest growing in the region year-to date (YTD).

"With the Dow Jones Industrial Average (DJIA) becoming more 'overbought' and the odds of armed conflict between the US and North Korea moving higher, share price movements abroad should have less impact on the PSEi based on the weak computed correlation of DJIA and PSEi," FMIC noted.