Stocks rise further on improved economic outlook

By Denise A. Valdez, Senior Reporter

THE MAIN INDEX rose to its highest level in more than three months as local and foreign investors picked up shares on increasing optimism over the economy’s recovery.

The bellwether Philippine Stock Exchange index (PSEi) advanced 165.88 points or 2.71% to close at 6,278.59 on Wednesday. The broader all shares index grew 79.59 points or 2.16% to end at 3,760.85.

This marked the third consecutive day that the PSEi posted a gain and the index’s return to the 6,200 level since July 8’s 6,285.50 finish.

“The local bourse managed to close above the 6,200 level as investor sentiment remains optimistic over the economic reopening of the country,” Timson Securities, Inc. Trader Darren T. Pangan said in a text message.

While Metro Manila mayors have previously said they want the existing lockdown status to last until the end of the year, the government has started issuing exemptions to current quarantine rules to accommodate more business sectors to reopen.

On Wednesday morning, the Department of Tourism said it will allow hotels to operate at full capacity even under the current lockdown status, which used to limit them to a skeleton workforce.

This caused the property sub-index to rise to 2,995.06 at the close of Wednesday’s trading, up 103.84 points or 3.59%.

Financials also grew 59.20 points or 4.89% to 1,268.21; mining and oil increased 283.06 points or 3.84% to 7,644.92; holding firms rose 144.81 points or 2.29% to 6,447.56; services climbed 16.54 points or 1.13% to 1,469.47; and industrials added 75.63 points or 0.91% to 8,352.31.

Another driver of the market’s growth was the return of foreign investors to net buying. After 28 straight days of net foreign selling, offshore investors posted net inflows of P343.24 million on Wednesday.

“Positive sentiment carried over to the Philippine market after negotiations on a new round of fiscal stimulus (in United States) looked like making some progress,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.

After the Trump administration and House Speaker Nancy Pelosi agreed to discuss the proposed fiscal stimulus package on Tuesday, US stocks have risen: the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite indices grew 0.40%, 0.47% and 0.33%, respectively.

“Asian markets were mostly higher (on Wednesday) on the back of renewed optimism over a possible stimulus package in the US before the elections,” Timson Securities’ Mr. Pangan said.

Value turnover expanded to P10.52 billion on Wednesday with 2 billion issues switching hands, up from the previous session’s P8.23 billion with 2.24 billion issues.

Advancers stood at 163, decliners at 49, while unchanged names totalled 39.