PSE index returns to 8,000 level on S&P upgrade

By Arra B. Francia, Senior Reporter

LOCAL EQUITIES firmed up on Thursday, as investors reacted positively to the country’s rating upgrade from S&P Global Ratings.

The benchmark Philippine Stock Exchange index (PSEi) breached the 8,000 mark yesterday after it climbed 0.61% or 48.85 points to 8,001.57. This marks the PSEi’s return to the 8,000 level since April 10.

The broader all-shares index likewise climbed 0.47% or 23.33 points to 4,912.89.

“The spotlight focused on the Philippine market as the country got a boost from its credit rating courtesy of S&P,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile phone message.

S&P raised the Philippines’ long-term sovereign credit rating to “BBB+” from “BBB” on Tuesday, marking the first upgrade since 2013 as it cited the country’s strong economic growth supported by solid government fiscal accounts, low public indebtedness, and the economy’s sound external settings. The rating carries a stable outlook, which means it is unlikely to change in the next six months to two years.

Philstocks Financial, Inc. Research Associate Japhet Louis O. Tantiangco also attributed the PSEi’s increase to the rating upgrade.

“The main driver was the upgrade in the Philippines’ credit rating from BBB to BBB+ by S&P Global Ratings. The upgrade elevated confidence on our country’s macroeconomic fundamentals and opened more economic opportunities through easier debt access, something which cheered investors,” Mr. Tantiangco said in a text message.

Aside from lifting the PSEi, Mr. Limlingan added that the rating upgrade is seen to strengthen the peso against the dollar in the near term, under the assumption that investors are likely to put more money in the Philippines.

Four sectoral indices moved to positive territory, led by industrials which jumped 1.64% or 190.71 points to 11,799.63. Services rose 1.41% or 22.36 points to 1,608.54; financials increased 0.85% or 14.97 points to 1,758.63; and holding firms added 0.39% or 30.19 points to 7,668.39.

In contrast, property fell 0.24% or 10.78 points to 4,318.22, while mining and oil slipped 0.15% or 11.56 points to 7,709.05 on Thursday.

Some 746.08 million issues switched hands valued at P8.17 billion, higher than Tuesday’s P6.98 billion.

Advancers outpaced decliners, 109 to 81, while 52 names were unchanged.

Foreign investors extended their net buying position to P293.17 million on Thursday, although lower than the previous session’s P413.29 million.

The PSEi bucked the negativity in markets overseas. The Dow Jones Industrial Average dropped 0.61% or 162.77 points to 26,430.14; the S&P 500 index fell 0.75% or 22.10 points to 2,923.73; while the Nasdaq Composite index dipped 0.57% or 45.75 points to 8,049.64.