MANILA – – The Philippine Stock Exchange index (PSEi) again surged to a new high Tuesday on report of sustained robust growth of the Philippine economy.The peso, however, fell to its weakest since Nov. 14, 2017.
With growth, as measured by Gross Domestic Product (GPD), still strong, PSEi posted a new record-high of 8,999.02 points, up by 0.54 percent, or 48.40 points from the previous record of 8,950.62 points hit Monday this week.
Its intraday high also posted a new record Tuesday at 8,999.02 points from the previous all-time high of 8,975.12 points a day ago.
A trader said investors still consider the growth strong despite its deceleration from the previous quarter.
The Philippine Statistics Authority (PSA) reported that fourth quarter 2017 output stood at 6.6 percent, lower than the upwardly revised seven percent in the previous quarter, bringing the average for the year at 6.7 percent, within the government’s 6.5-7.5 percent target.
The trader said slower growth of exports as against the jumps in imports was the main issue here but also pointed out that sustained rise if imports was necessary as the domestic economy continue to expand.
PSEI’s rise was mirrored by the broader All Shares after it rose by 0.80 percent, or 41.60 points to 5,214.61 points.
Five of the six sectoral indices followed, led by the Holding Firms, which increased by 1.20 percent.
Mining and Oil rose by 0.65 percent; Services, 0.55 percent; Industrial, 0.48 percent; and Property, 0.41 percent;
Only the Financials ended the day on the red with a 0.43 percent decline.
Volume during the day totaled to 1.19 billion shares amounting to PHP8.5 billion.
Gainers led losers at 125 to 84 while 47 shares were unchanged.
On the other hand, the peso ended the day at 51.10 from the previous day’s 50.835.
A trader said the local unit ended to its lowest since its 51.18 finish on Nov. 14, 2017, which was attributed partly on the 6.7 percent output expectations by market players.
Also, ING Bank Manila senior economist Joey Cuyegkeng said demand for dollars in line with the country’s importation dragged the peso “with the income tax cuts of TRAIN-Package 1 generating demand for consumer durables including vehicles.”
He also traced the higher demand for the greenback to higher hedging activities and uptick in oil prices in the international market.
“The demand had a more significant impact in a market when inflows (also from OFWs [Overseas Filipino Workers]) are seasonally becoming slow before rising again seasonally within two to three months,” he said.
Cuyegkeng, however, pointed out that the slower-than-expected growth of the domestic economy in the last quarter of last year “should not have had a major influence in the market since the pace of growth was more or less in line with consensus while 6.7 percent was expected.”
“Market continues to expect growth to be sustained at these levels in 2018, which is within striking distance of government’s 2018 GDP growth target,” he added.