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PHL shares climb on firms’ earnings, dovish Fed

STOCKS climbed on Monday on strong third-quarter results of listed companies and hopes that the US Federal Reserve will begin to consider smaller rate hikes at their meeting next month.

The benchmark Philippine Stock Exchange index (PSEi) went up by 110.05 points or 1.77% to close at 6,295.58 on Monday, while the broader all shares index rose by 39.87 points or 1.21% to finish at 3,313.57. 

Philstocks Financial, Inc. Research Analyst Claire T. Alviar said PSEi went up amid hopes of slower rate hikes by the Fed following dovish statements from several US central bank policy makers last week.

Four Fed officials said they would still consider a smaller rate hike at their policy meeting on Dec. 13-14, even amid strong data that could strengthen the case for continued aggressive tightening to bring down inflation.

The US central bank last week delivered a fourth straight 75-basis-point (bp) hike, bringing cumulative increases since March to 375 bps.

“Philippine stocks moved sideways as negative macroeconomic conditions are being offset by surprisingly strong corporate fundamentals,” AB Capital Securities, Inc. Vice-President Jovis L. Vistan said in a Viber message.

“Market participants had to contend with decade-high inflation and rising global interest rates. However, the first batch of third-quarter corporate earnings results have mostly come out better than expected,” Mr. Vistan added.

Philippine headline inflation picked up to 7.7% in October, its fastest pace in almost 14 years, due to higher food prices following recent typhoons.

This was up from the 6.9% print in September and 4% in October 2021, and was the fastest in nearly 14 years or since the 7.8% seen in December 2008 during the global financial crisis.

For the first 10 months, inflation averaged 5.4%, faster than 4% a year ago and the central bank’s 2-4% target but still lower than its 5.6% forecast for the year.

Almost all sectoral indices closed higher on Monday. Property went up by 89.86 points or 3.45% to 2,693.49; services rose by 28.66 points or 1.78% to 1,635.26; holding firms gained 78.55 points or 1.32% to end at 6,018.61; industrials added 103.93 points or 1.15% to close at 9,112.49; and financials climbed by 12.30 points or 0.76% to 1,615.29. 

Meanwhile, mining and oil declined by 102.98 points or 1.03% to 9,846.19.

Value turnover went up to P4.48 billion on Monday with 337.75 million shares changing hands from the P3.97 billion with 304.79 issues traded on Friday.

Advancers overwhelmed decliners, 117 versus 62, while 50 names closed unchanged.

Net foreign buying rose to P391.21 million on Monday from P265.63 million on Friday.

AB Capital Securities’ Mr. Vistan put the PSEi’s support at 6,150 and resistance at 6,300. — A.E.O. Jose