Index gets lift from remittance growth in May

MANILA, Philippines — Dollar remittances provided a lift to stock trading as investors moved on from Fitch’s credit outlook downgrade to a brighter spot in the rise in remittance inflows.

The benchmark Philippine Stock Exchange index (PSEi) finished at 6,835.41, up by 40.28 points or 0.59 percent, while the broader All-Shares index gained 11.72 points or 0.28 percent to close at 4,227.48.

The local market fluctuated between gains and losses for the session before ending higher on last-minute buying, AB Capital Securities said in a commentary.

It said net foreign selling persisted for the eighth straight session with P170 million, while value turnover was muted with P4.37 billion.

Market breadth was negative, 117 to 70, while 58 issues were unchanged.

Traders said several investors realized the concerns of a possible credit rating downgrade may be too early.

The market ended slightly higher in another low volume trading session which proved that (Tuesday’s) selloff was just a knee-jerk reaction to reports of a possible credit rating downgrade from global debt watcher Fitch, said Chris Mangun of AAA Southeast Equities.

In addition, growth in OFW remittances which came in at $2.65 billion in May, up 13.3 percent from the same month last year, may have further improved sentiment, he added.

This was the largest monthly growth rate for remittances since 2016 and also the second month in a row of double-digit growth.