Manila, Philippines – The Philippine Stock Exchange Index fell sharply today after the August inflation figures were released today. The leading index dropped by 129.55 points or 1.64 percent at 7752.27.
The broader all-share index was down by 1.33 percent.
The decline was across the board as all sub-indices were down for the day.
The worst performing sub-index is the Property sector, which was down by 1.86 percent. It is followed by the Mining and Oil sector, a drop of 1.66 percent.
Within the Mining and Oil sector, SCC led the sub-index lower as it closed at 30.00. The figure is lower by 1.64 percent versus yesterday’s close.
Meanwhile, PXP closed at 14.80, which is lower by 2.89 percent. NIKL closed at 5.25 — lower by 1.87 percent. APX closed at 1.51 — lower by 2.58 percent.
Within the Property sector, SMPH led the sub-index lower as it closed at 37.75. It is lower by 2.45 percent versus yesterday’s close.
Furthermore. ALI closed at 43.40, a decrease of 1.81 percent. MEG closed at 4.53 — lower by 2.58 percent. FLI closed at 1.46, a drop of 2.01 percent.
The most active stocks today include ALI with PHP 504.88 million in traded value. BDO also made it to the top gainers with a traded value of PHP 450.55 million. SMPH also had PHP 429.55 million in traded value.
Gainers and Losers for the Day
Significant gainers for the day include OPM, which was higher by 16.67 percent; STR, by 8.59 percent; ALCO, by 5.56 percent; PRMX, by 3.99 percent; WPI, by 3.80 percent; and, LRW, by 3.45 percent.
On the other hand, the notable losers include SSI, which was down by 6.22 percent; MHC, by 6.06 percent; ISM, by 6.01 percent; TBGI, by 5.97 percent; and, H2O by 5.83 percent.
Joining the losers for the day are BCOR with a decline of 5.08 percent; BDO, by 5.08 percent; and, VUL, by 5.08 percent.
There were 51 advances and 146 declines, while 38 names remain unchanged. Value turnover totaled PHP 5.86 billion. Foreign exchange rate stood at USD 1: PHP 53.535.
August Inflation Beyond Expectations
The Philippine Statistics Authority (PSA) released data regarding the inflation for August.
Inflation hit 6.4 percent for August, which is higher than July’s 5.7 percent. It is also higher than the recorded 2.6 percent in August 2017.
The rate is the highest for the past ten years in which inflation clocked in at 6.6 percent in March 2009.
This rate is also above the expected range of the Bangko Sentral ng Pilipinas (BSP). BSP expected that it will hover only between 5.5 and 6.2 percent. The department of finance also expected inflation at only around 5.9 percent.
With the current inflation figures, the year to date average is now at 4.8 percent. This figure is way beyond the 2 to 4 percent range estimated for the year. However, it shies away from the 4.90 percent forecast.
Meanwhile, the food cost rose to 8.2 percent. This figure was higher than the recorded 6.8 percent last month and 3.31 percent last year.
Additionally, tobacco and alcoholic beverages were higher by 21.6 percent. Health rose by 4 percent while restaurants and miscellaneous goods by 4 percent. Recreation and culture experienced a 2.4 percent increase, and household equipment and furnishing at 3.5 percent.
Core inflation, which does not include energy and food items, was at 4.8% — higher than last month’s 4.5% and August 2017’s 2.2%.
BSP Governor Nestor Espenilla Jr. attributed the spike to cost push factors and elevated oil prices. In turn, it pushed prices of power and transport.
BSP may evaluate if there would be a need to hike the rates further to curb inflation. The central bank already increased valuations cumulatively by 100 basis points.
The next policy meeting is on September 27, 2018.
New Higher High
The index fell sharply today after inflation figures went out. The index even went below the 7700 level but was able to recover some ground at market close.
The 15 EMA and 20 SMA are still immediate support. MACD is now poised for a bearish crossover.
Furthermore, RSI is somewhat bearish but is at neutral levels. Estimated support is now at 7635 while expected resistance is at 7824.
Foreign Fund Flow
PSEi registered a Net Foreign Selling worth P1,042,639,726.35 as of September 05, 2018.
On a 30-day trading period, PSEi is on a Net Foreign Selling worth PHP4,809,079,512.11.
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