Manila, Philippines – The Philippine Stock Exchange Index started off weak and even dipped below the 7100 level. However, it did a last-minute rally at the close to moving above 7200.
The index closed at 7,210.87, which is higher by 54.74 points or 0.75 percent. The broader all-share index is higher by 0.51 percent.
The rally was across the board as all sub-indices closed higher. The best performing sub-index is the Property sector, rising by 2.11 percent. It is followed by the Mining and Oil sector with a 1.55 percent increase.
Within the Property sector, ALI led the sub-index higher as it closed at 40.50. This amount is higher by 3.05 percent versus yesterday’s close. SMPH closed at 34.50 higher by 1.92 percent.
Meanwhile, RLC closed at 20.30, which is higher by 1.50 percent. DD closed at 19.84 with a 3.01 percent increase.
Within the Mining and Oil sector, PXP led the sub-index higher as it closed at 16.90. This figure is higher by 4.84 percent versus yesterday’s close.
Concurrently, SCC closed at 24.70 higher by 0.82 percent. APX closed at 1.58, higher by 6.76 percent. PX closed at 3.32, higher by 1.22 percent.
Which Stocks Traded the Largest Volume?
The most active stocks today include FB with PHP 385.13 million in traded value. SMPH made it to the top gainers with a traded value of PHP 242.00 million. AEV also had PHP 208.94 million in traded value.
Significant gainers for the day include APX, which closed higher at6.76 percent, SSI by 5.38 percent, MAC by 4.94 percent, and MER by 4.91 percent.
Joining the ranks are PXP shooting up by 4.84 percent, MJC by 4.64 percent, and JGS by 3.98.
On the other hand, the notable losers include GSMI, which went down by 6.31 percent and ISM by 4.90 percent.
There were 93 advances and 92 declines, while 60 names remain unchanged. Value turnover totaled PHP 3.76 billion. Foreign exchange rate stood at USD 1: PHP 54.25.
Index Still Expected to Get Above the 8,000 Level
ANZ Research stated that it sees an increase above 7 percent for the remaining months of the current year. It also doubts the government ‘s expectations that the country already reached the peak of inflation during the last quarter.
The research group reiterated that inflation is unlikely to ease anytime soon, with price pressures stoked by typhoon Mangkhut/ Ompong, spilling into the quarter.
The typhoon damaged Isabela, Central Luzon, Cagayan Valley, and the Cordillera Administrative Region, which produce rice and vegetables that could weigh in on food prices.
This observation is also in agreement with Sun Life’s expectation that inflation will go higher than 7 percent.
Inflation for the first nine months already averaged to 4.5 percent. This figure is above the inflation expectation of Bangko Sentral ng Pilipinas (BSP) at only 2-4 percent for the entire year.
August marked inflation of 6.4 percent, which is a nine-month high at the back of the shortage of rice, vegetables, and even meat and fish.
Rising global prices also weighed in on local oil prices. It affected the overhead cost of basic goods as well.
BSP Adds 50 Basis Points
To temper this inflation figures, the BSP raised rates for an additional 50 basis points. This brings the cumulative rates higher by 150 basis points year to date.
As fiscal policy, the government also ordered the National Food Authority (NFA), the Department of Agriculture, and the Sugar Regulatory Administration to lift non-tariff barriers. The agenices shoudl also fast-track the importation of rice, sugar, meat, and fish.
The research agency also added that it expects another 25 basis point increase in rates in the next BSP meeting in December.
The weak peso, which is down almost down 8 percent year to date at PHP 54.25, adds up to the country’s inflation pressure.
ANZ anticipates a full-year inflation around 5.1 percent, a little below BSP’s 5.2 percent estimate. Some banks estimated the increase between 4.90 percent to 5.3 percent.
It also expects economic growth to drop lower at 6.5 percent versus the 6.6 percent in August and the 6.8 percent earlier this year.
Not Out of the Jungle Yet
The market bounced today after finding firm support at the 7134 level. However, the moving averages are still bearishly aligned with the 15 EMA and 20 SMA as immediate resistance.
It is also in confluence with the 61.80 percent Fibonacci retracement line. MACD Is bearish. RSI is also bearish but is moving sideways.
Furthermore, estimated support is at 7134 while expected resistance is at 7278.
Foreign Fund Flow
PSEi registered a Net Foreign Selling worth P281,904,212.85 as of October 03, 2018. On a 30-day trading period, PSEi is on a Net Foreign Selling worth PHP12,228,373,825.17.
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