PSEi closes flat as investors 'already priced in' GDP slump
MANILA, Philippines — Stock market investors appeared to have shrugged off a record-breaking contraction of the Philippine economy in the first quarter and instead opted to look forward to an easing of movement restrictions in Luzon next week.
It was a flat trading day at the Philippine Stock Exchange as the main index inched up 0.25% or 13.89 points to close at 5,653.16. The broader all-shares index fell 0.06% or -2.17 points to 3.413.88.
Trading ended few hours after the government reported that the gross domestic product (GDP) slumped 0.2% in the first three months, contracting for the first time since the final quarter of 1998.
“Investors already priced in the PH GDP result, which we think was widely expected,” Piper Chaucer Tan, research associate at Philstocks Financial Inc., said in a text message.
More than the decline in GDP, Tan said investors chose to focus on the impending expiration of the enhanced community quarantine (ECQ) in Metro Manila and some other key areas like Cebu by May 15. The government had said lifting the ECQ would open the doors to a more relaxed general community quarantine.
“I think the recent news about lifting some areas under ECQ, most especially in (National Capital Region), has some slight impact on the market and the government’s attempt to restart the economy,” he said.
Luis Limlingan, head of sales at brokerage Regina Capital Development Corp., agreed. “Philippine shares traded on a positive note as investors brushed off the contraction in (first quarter) GDP with a possibility that the country may ease the lockdown after May 15 as mentioned by the administration,” he said in a market commentary.
“The local bourse still managed to eke out reasonable gains with expectations that the country may have soon reached the bottom, and the reopening of economy is soon and imminent,” he added.
Sub-indices at the PSEi were divided among gainers and losers, with property becoming the biggest winner with a 1.75% rally, while services led the losing segment by falling 1.65%.
Decliners trumped advancers, 112 to 63. Forty-two names were unchanged.
ABS-CBN trading still suspended
Meanwhile, shares of ABS-CBN Corp. were suspended from trading for the second day after the network's free TV and radio channels were cut off air by the government. PSE said it is awaiting report from the media giant on how the halt order last Monday would affect its business.
Offhand, the Lopez-led firm had reportedly said that it would continue to meet its obligations, while workers at the network shared that the management will not be letting go of their employees over the next three months.
The shutdown of ABS-CBN free channels apparently benefited its listed rival GMA Network Inc. last Wednesday. But on Thursday, GMA shares sank 7.46% to end the day at P5.46 apiece.
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