PSEi posts solid gains on improving sentiment

THE LOCAL STOCK EXCHANGE posted robust gains in August as sentiment improved amid heightened certainty about the current administration’s economic priorities and as listed companies posted strong second-quarter results.

The Philippine Stock Exchange Index (PSEi) has risen 436.57 points or 6.9% so far this month to end at 6,752.50 on August 26 since its end-July close.

At the end of July, the PSEi gained 2.6% on a monthly basis, while in June it fell by 9.1%.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the PSEi rose as market sentiment was supported by President Ferdinand “Bongbong” R’s first State of the Nation address. Marcos, Jr. “because he covered many issues related to economics.” priorities and reiterated earlier signals from the economic team, in particular the economic growth targets and fiscal management in terms of reducing the country’s budget deficit and debt-to-GDP (gross domestic product) ratio.

“Generally better corporate earnings or results also supported market sentiment and overall valuations,” Ricafort said in a Viber post.

However, he warned that if the Russian-Ukrainian war drags on, it could lead to increased volatility in global markets. Iffinancial markets.

Regina Capital Development Corp. sales manager Luis A. Limlingan said indicators such as signs of spikes in US inflation and strong earnings reports also boosted the market.

“Philippine macro indicators and corporate earnings were also encouraging as high property prices did not affect earnings as much as analysts had expected,” Limlingan said in a Viber message.

“Despite the month of ‘Au-ghost,’ the Philippines index climbed nearly 400 points, indicating the market is recovering well from the June tumble,” said Marc Kebinson L. Lood, head of online trading. at Timson Securities, Inc. Message Viber.

The ghost month is a period of the lunar calendar when some Asian investors refrain from making big investments or big decisions, which leads to lower trading volumes. For this year, it has been set from July 29 to August 26.

“The main factors that contributed to the strong market performance were signs of slowing inflation in the Philippines, a weaker than expected inflation print in the United States and a better than expected corporate earnings report, which boosts investor confidence,” Mr. Lood added.

Headline inflation in the Philippines rose further to 6.4% in July from 6.1% in June and 3.7% a year ago, according to preliminary data from the Philippine Statistics Authority.

The July inflation print was the fastest since the 6.9% recorded in October 2018.

Meanwhile, U.S. consumer prices slowed last month as gasoline prices fell sharply, rekindling market sentiment that the U.S. Federal Reserve may reverse its aggressive price hikes. interest rate.

The US consumer price index rose 8.5% year-on-year in July, slower than the 9.1% rise recorded in June. — Justine Irish D. Tabile

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