Manila, Philippines – The index continues to move high today. The index ended at 7099.68, which is higher by 112.66 points or 1.61 percent.

The broader all-share index rose by 1.23 percent.

The rally was across the board as all sub-indices closed in the green. The best performing sector is the Mining and Oil sector, which rose by 2.74 percent followed by the Financial by 2.73 percent.

Within the Mining and Oil sector, SCC led the sub-index higher as it closed at 27.05. This figure is higher by 3.64 percent versus yesterday’s close.

Meanwhile, NIKL closed at 4.58, higher by 4.09 percent. PXP locked at 16.38 with a 2.37 percent increase. PX closed at 3.22, flying by 0.63 percent.

Within the Financial sector, BDO led the sub-index higher as it closed at 116.10 The amount is higher by 3.66 percent versus yesterday’s close.

Furthermore, BPI closed at 82.95 with a 2.41 percent increase. MBT locked at 67.25, rising by 2.52 percent. SECB closed at 152.00, which is higher by 4.11 percent.

Which Stocks Traded the Largest Volume?

The most active stocks today include SMPH with PHP 375.69 million in traded value. SM also made it to the top gainers with a traded value of PHP 341.40 million. SEVN also had PHP 340.14 million in traded value.

Significant gainers for the day include PPG, which is higher by 13.21 percent, 2GO by 10.00 percent, ALCO by 8.33 percent, ISM by 8.30 percent, and URC by 7.64 percent.

On the other hand, the notable losers include VUL, which fell by 5.00 percent, SSI by 4.44 percent, and IDC by 4.30.

There were 129 advances and 57 declines, while 46 names remain unchanged. Value turnover totaled PHP 5.00 billion. Foreign exchange rate stood at USD 1: PHP 53.96.

No Need for Further Tightening

Bangko Sentral ng Pilipinas (BSP) considers putting its tightening policies on hold should inflation starts to decline.

The removal of rice importation quotas and the previous rate hikes may already seep into the system, and its effects felt this quarter four of the year.

However, BSP is still on a watch and see as rising oil prices in the world market may contribute to rising inflation. The Monetary Board stated that the inflation could clock in faster this month while the entire BSP sees that inflation already peaked last September.

The increase for September hit 6.7 percent, which is higher than the recorded 6.2 percent in August. Nonetheless, this is lower than consensus expectations at 6.8 percent to 7 percent.

The central bank expects inflation to average 5.2 percent this year and 4.3 percent next year, both above targets of 2-4 percent.

The government expects the Peso to trade between PHP 52 – PHP 55 next year. This may add to inflation pressures with the rise of oil prices.

To help curb inflation, the President and the legislators push for the cancellation of the next tranche of oil excise taxes this January 2019 amounting to around PHP 1.50 per liter.

They can effectively cancel the hike should the average price of oil in the world market stand at USD 80.00 per barrel for the preceding three months. With the expectation that oil will hit USD 100 per barrel soon, the move to cancel the rate hike is justified.

Year to date, the BSP already raised rates by 150 basis points or 1.50 percent. Initially, another 25 basis point hike is expected this year and another 50 basis points next year. The next Monetary Board meeting is scheduled for November 15.

Growth Targets Adjusted

The Development Budget Coordination Council cut economic growth as measured by the GDP. The initial target was between 7-8 percent in its July meeting that got cut down to 6.5-6.9 percent, which is below the minimum target.

It was mainly attributed to the rising inflation in the face of a tighter credit market. Nevertheless, it held its 2019-2022 GDP growth target of 7-8 percent.

GDP for the first half of the year clocked in at 6.3 percent versus the recorded 6.6 percent in the same comparable period in 2017.

Index Rallies Strong

The index rallied strong today and but the 20 SMA stopped it. However, the moving averages are still aligned bearishly.

Moreover, MACD is poised for a bullish crossover. RSI is also turning bullish but is currently at neutral levels.

Estimated support is at 6928 followed by 6849. Expected resistance is at 7140.

Foreign Fund Flow

PSEi registered a Net Foreign Selling worth P633,656,339.97 as of October 17, 2018. On a 30-day trading period, PSEi is on a Net Foreign Selling worth PHP16,498,182,616.38.

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