U.S. GROWTH WOES KEEP BOURSE WEAK
US GROWTH FELL BY 0.9 PERCENT IN THE SECOND QUARTER, MISSING THE 0.3 PERCENT CONSENSUS ESTIMATE.
Stocks were sold to close the month lower after the successive bargain hunting session, as investors became wary of the negative United States (US) gross domestic product (GDP) reading.
The Philippine Stock Exchange index (PSEi) closed at 6,315.93 down by 63.33 points.
US growth fell by 0.9 percent in the second quarter, missing the 0.3 percent consensus estimate.
The first quarter GDP declined by 1.6 percent. The slowdown in growth made the markets bet that the US Federal Reserve would slow its aggressive hiking campaign, according to Regina Capital Development Corp. managing director Luis Limlingan.
On Friday, investors will get an updated look at a key inflation reading and second-quarter employment costs, which could be key data points for the Fed as it considers its next move.
Bangko Sentral ng Pilipinas Governor Felipe Medalla acknowledged that the Fed’s action, coupled with dimming global growth prospects, could weigh on the forex movements in emerging economies, including the Philippines.
The Monetary Board will hold its 5th policy-review meeting on 18 August, wherein Medalla hinted at a possible 25 to 50 basis points rate hike.
Index rejiggered
The index review from July 2021 to June 2022 showed that Semirara Mining and Power Corporation (SCC) should be a member of the 30-company PSEi. SCC will replace Security Bank Corporation effective 8 August 2022.
The top publicly listed companies based on liquidity, market capitalization, and free float level are the securities considered for inclusion in PSE indices. Aside from these criteria, relevant financial benchmarks are also used in the index review.
“This is the last index recomposition with a free float requirement of at least 15 percent. As announced in August 2021, companies should have a public ownership level of at least 20 percent to qualify for index inclusion in the next review period. We expect companies that would like to remain index constituents but have a free float of less than 20 percent to take the necessary corporate action to address this concern,” PSE president and CEO Ramon Monzon said.