The local stock market started the year on a strong note as it recorded an increase on the first trading day of 2024.
The peso ended weaker.
The Philippine Stock Exchange index surged 104 points or 1.61 percent, reaching a closing value of 6,554.04.
The broader all shares index also saw an increase of 41.38 points or 1.21 percent.
“The local bourse kicked off the year on a positive note, fueled by the expectation that the Philippines’ inflation rate would slowdown. The possibility that inflation rate would settle within the two to four percent target of the government in December lifted market sentiment,” Philstocks research said.
Majority of the sectors were in the green led by holding firms with a 3.56 percent increase, followed by services adding 2.33 percent.
Meanwhile, the mining and oil sector lost the most, dropping 1.14 percent, along with property which fell 0.68 percent.
Total value turnover was at P3.66 billion.
Advancers beat decliners 100 to 77, while 47 stocks were unchanged.
The peso closed at 55.67 to the dollar, its intraday low, slightly weaker from the 55.37 close on December 29, the last trading day in 2023.
The currency opened strong at 55.45 and hit a high of 55.44.
Trading volume amounted to $1.26 billion.
Stockbroker Abacus Securities Corp. sees a good run for the market in the first half of the year with sentiments driven by the expectation of the central bank cutting rate.
This is despite economists’ expectations the cuts will be made in the latter half of 2024.
“Most economists apparently believe rate cuts will be back-ended. This represents an opportunity to be more aggressive in accumulating the stocks we like or those that have underperformed this year,” the stockbroker said in a research note.
Ramon Monzon, Philippine Stock Exchange president, said the stock market will benefit from the robust economy of the country, expected to outpace regional neighbors’.
“The Philippines is projected to lead the Asean region with the highest GDP growth in 2024 at 6.2 percent (Vietnam, 6 percent; Indonesia, 5 percent; Malaysia, 4.6 percent; Thailand, 3.3 percent; Singapore, 2.5 percent) based on the Asian Development Bank’s Asian Development Outlook,” Monzon said.
Monzon also noted inflation is projected to decrease close to 4percent from an average of 6.9 percent year-to-date as of end-November 2023.
The government is set to release the December inflation data by Friday, January 5.
Monzon said t disinflation is convincing various central banks, notably the US Fed and the local Bangko Sentral ng Pilipinas (BSP), to cut rates this year.
“The PSEi closed at 6,450.04 points at yearend, down 1.8 percent from last year’s finish of 6,566.39 points. For 2024, analysts project PSEi at a range of 6,800 to 8,300 points” he said.
“The expected rate cuts by the US Fed and BSP, as well as the government’s aggressive spending on infrastructure projects, and continued increase in foreign investment pledges are expected to stimulate consumption, generate job opportunities, and encourage additional investment. Risks to the positive outlook next year remain such as the potential impact of higher transport charges, electricity rates, and international oil prices,” Monzon added.
Monzon said the PSE is keeping its sight on attracting six initial public offerings (IPOs) this year starting with Citicore Renewable Energy Corp..
“Since no new REITs were added in 2023, we hope to see REIT IPOs make a comeback this year. Our capital raising forecast is P175 billion, around P40 billion of which will come from IPOs,” he said. – With Ruelle Castro
