Share prices surged for the third straight day on Wednesday, driven by a lower-than-expected February inflation rate.
Before the opening bell, the Philippine Statistics Authority (PSA) announced the inflation rate eased to 2.1 percent last month from 2.9 percent in January this year. In February last year, the inflation rate stood at 3.4 percent, the PSA said.
The latest figure is also slower than the 2.65 percent inflation rate the six banks polled by Malaya Business Insight had expected for the month.
This encouraged investors to continue buying up stocks, leading to a 0.95 percent or 57.66-point uptick in the Philippine Stock Exchange index (PSEi) as it closed at 6,121.77.
The broader All-Shares index picked up pace and ended higher by 35.58 points or 0.98 percent at 3,664.54.
Gainers edged out losers 114 to 77, with 55 stocks unchanged. Trading turnover reached P7.35 billion.
Analysts said the inflation slowdown augurs well for the country’s aspirations for robust growth this year.
“The local market rose further this Wednesday as investors appreciated the Philippines’ February inflation rate, which came in below
expectations at 2.1 percent. The slowdown in the country’s inflation is seen helping its GDP performance, primarily in household consumption. It is also seen raising the prospects for the Bangko Sentral ng Pilipinas’ (BSP) policy easing,” online stock trading platform Philstocks Financial Inc. said.
Emilio Neri, Jr., lead economist at Bank of the Philippine Islands (BPI), said the surprising inflation number “should free up funds for spending on other food and discretionary items.”
“This could be a great story for retail and consumer counters of PCOMP (PSEi). (It) may not be good for bonds,” he said, noting that the BSP’s decision to cut banks’ reserve requirement ratio was timely.
Luis Limlingan, managing director at Regina Capital and Development Corp., however, said how the market could ride on the inflation-driven momentum would also depend on other factors such as the strength of the peso.
DA Market Securities said optimism among market players was used by most foreign investors as an excuse to ease up on their holdings, resulting in $1.85 million worth of net foreign selling. Foreign funds are net sellers worth $257.05 million on a year-to-date basis, it said.
The most actively traded International Container Terminal Services Inc. dropped P3 to P337. BDO Unibank Inc. closed up P1.90 at P152.90. Ayala Land Inc. rose P1.35 to P23.25. Ayala Corp. gained P16.50 to P570. SM Prime Holdings Inc. closed up P0.80 at P23.60. Metropolitan Bank and Trust Co. shed P3.40 to P70.15. JG Summit Holdings Inc. gained P1.46 to P17.76. Jollibee Foods Corp. was steady at P252. Bank of the Philippine Islands climbed P1.50 to P128.50. SM Investments Corp. dropped P3 to P805.
