PHILIPPINE SHARES sank further on Tuesday, dragging the bellwether index to a new five-year low, as sentiment on the economy’s state worsened following weak financial results from some listed companies.
The Philippine Stock Exchange index (PSEi) fell by 1.29% or 73.57 points to close at 5,629.07, while the broader all shares index dropped by 0.93% or 32.82 points to end at 3,465.61. This was the PSEi’s worst finish in nearly five-and-a-half years or since it closed at 5,570.22 on May 28, 2020.
“The market remained weak as investors continued to price in softer gross domestic product (GDP) growth for the next few quarters, with third quarter corporate earnings starting to show strain from the weakening economy,” AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said in a Viber message.
“The local market extended its decline as investors remained pessimistic towards our general economy following the release of the dismal third quarter GDP figures. The economic outlook is also weighed down by the damage inflicted by the recent typhoons and the declining foreign direct investments,” Japhet Louis O. Tantiangco, research manager at Philstocks Financial, Inc., said in a Viber message.
Philippine economic growth slowed to an over four-year low of 4% in the third quarter from 5.5% in the prior quarter and 5.2% in the same period last year, the government reported on Friday.
This was well below market expectations of an above-5% clip as corruption allegations surrounding state infrastructure projects affected government spending and consumer sentiment.
The third-quarter print brought the nine-month average to 5%, well below the government’s 5.5-6.5% full-year GDP growth target. Officials said meeting this goal could be very challenging, especially as more typhoons could hit the country this quarter.
Analysts also said that the economy’s weakness could persist unless governance issues are resolved.
Most sectoral indices closed in the red on Tuesday. Financials plunged by 2.99% or 56.86 points to 1,841.06; property dropped by 2.06% or 42.56 points to 2,018.79; holding firms fell by 1.3% or 59.70 points to 4,527.25; industrials went down by 1.28% or 107.83 points to 8,263.46; and mining and oil decreased by 1.13% or 154.07 points to 13,449.32.
Meanwhile, services jumped by 1.22% or 27.79 points to 2,293.76.
Decliners overwhelmed advancers, 123 to 59, while 63 names were unchanged. “DigiPlus Interactive Corp. was the day’s top index gainer, jumping 7.65% to P27.45. Universal Robina Corp. was the worst index performer, plunging 6.64% to P66.10,” Mr. Tantiangco said.
Value turnover climbed to P8.56 billion with 2.03 billion shares traded from the P6.96 billion with 1.86 billion issues that changed hands on Monday.
Net foreign buying increased to P701.78 million from P122.02 million. — Alexandria Grace C. Magno
