Philippine stocks, peso flat on GDP results
MANILA, Philippines – Philippine stocks and the peso ended flat on Thursday, January 26, as the "expected" gross domestic product (GDP) data for the full-year 2016 failed to boost investor sentiment, economists said.
The bellwether Philippine Stock Exchange index (PSEi) inched up by 9.28 points or 0.13%, closing at 7,332.64 points.
The peso, meanwhile, slighly strengthened against the dollar, gaining 0.05 centavos to P49.805:$1 when the market closed on Thursday at 4:30 pm.
"Markets traded rather flat as the 2016 GDP came out within expectations this morning," Luis Limlingan, managing director of Regina Capital Development Corporation, said in a mobile phone message on Thursday.
The Philippines ended 2016 with a strong 6.8% economic growth.
"Some slight bargain hunting was observed mainly owing to the fact that US stocks recorded a trifecta of all-time highs on Wednesday," Limlingan said.
The Dow Jones Industrial Average, the most famous equity index benchmark on Wall Street, shot above 20,000 for the first time on Wednesday, January 25.
Q4 GDP 'weaker than expected'
For Land Bank of the Philippines market economist Guian Angelo Dumalagan, the peso appreciated slightly today, as weaker-than-expected Philippine GDP growth in the 4th quarter "failed to completely erase the local currency's early gain as a result of President Donald Trump's protectionist approach to trade."
Although the Philippine economy finished strongly, the country's GDP growth closed at 6.6% in the 4th quarter of 2016, which was slower than the 3rd quarter's 7%. (READ: Under Duterte, is PH economy in good hands?)
"The PSE index also declined initially after the weak growth report, but it eventually recovered perhaps because investors continue to have confidence in the Philippine economy," Dumalagan said.
For Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr, the full-year growth of 6.8% and 4th quarter growth of 6.6% were both "in line with market expectations."
"The government thrust on infrastructure spending should provide a solid base for the economy to meet the 2017 growth target. The inflation outlook also remains manageable. Thus, there is no real pressing need to deviate from [the] current stance of monetary policy," Tetangco said.
Value turnover grew to P7.021 billion as over 2.701 billion shares changed hands.
Data from the PSE showed that net foreign selling was recorded at P309.979 million during the session. – Rappler.com
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