GOING FOR 6,000 President Aquino (third from left) poses with business tycoons and officers of the Philippine Stock Exchange (PSE) after ringing the bell in Makati City on Tuesday to mark last Friday’s historic market closing level of above 5,000 points. With the President are (from left) Andrew Tan, Teresita Sy-Coson, Jaime Augusto Zobel de Ayala, PSE chair Jose Pardo, PSE president Hans Sicat and BPI president Aurelio Montinola III. EDWIN BACASMAS
The Philippines is experiencing a surge in portfolio investments from abroad on the back of renewed confidence among fund managers in the country’s economic prospects, Philippine Stock Exchange (PSE) chairman Jose Pardo said Tuesday.
Pardo pointed out that some P24.3 billion worth of net foreign buying in local shares had so far been recorded this year, reversing the net foreign outflow in the same period last year.
“The continued strengthening of our macroeconomic fundamentals, positive outlook on the growth of our listed companies and confidence in your administration’s good governance drive, among others, have been catching the attention of investors locally and globally,” Pardo said in a speech before President Benigno Aquino III took to the PSE trading floor to celebrate the stock index’s rise on Monday above the 5,000 mark.
“This historic rise of the index is a strong testament to the growing investor interest in the Philippines,” Pardo added.
Climb by 52%
The PSE index closed at 5,030.58 on March 5, marking the 11th time this year and the 19th under Mr. Aquino’s term that the market barometer set new highs.
On Tuesday, however, the PSEi ended the day sharply lower at 4,967.39—a correction of 63.39 points, or 1.26 percent—breaking five days of continuous advances.
“Since the first day of our President’s administration, or in a matter of 20 months, the index has also already climbed by 52 percent,” Pardo said.
He also pointed out that some P764 billion in wealth had been created in the stock market so far this year, representing the average 8.9-percent increase in the value across all firms listed on the bourse.
Open for business
More importantly, trading activity on the stock market has also increased in recent weeks, recently hitting P8 billion per day, representing a 65-percent increase over trading levels in the same period last year.
Pardo also pointed out that the PSE had since extended its trading hours into the afternoon to make the market more open to investors “as if to mirror the administration’s running slogan that the Philippines is open for business.”
The PSE chairman described the President’s desire to see the index breach the 6,000 mark as “ambitious,” but added that “the difficult takes a while and the impossible, just a little bit longer.”
“We believe that with the bold reforms your administration is undertaking, our market in turn can maintain its record-breaking advance,” Pardo said.
Yesterday’s activity marked the second time that Mr. Aquino visited the PSE trading floor to ring the ceremonial opening bell. On both instances, the stock market ended lower for the day.
In Malacañang, the President’s spokesperson said the stock index breaching the 6,000 level was a reasonable expectation.
The country has sound fundamentals and would be able to weather adverse developments in the world economy, Edwin Lacierda said.
“Our fundamentals are sound. The President has launched a program of addressing poverty and … [is pushing for] leveling the playing field. We are going to launch our several PPP projects this year,” Lacierda said at a news briefing.
With increased infrastructure spending, increased emphasis on sectors such as tourism and agriculture, “we believe that 6,000 is not a remote goal for our Philippine Stock Exchange,” he added.
Lacierda said the growth in the country’s economy would come from domestic consumption.
“We have strengths in our agricultural sector, tourism sector, infrastructure sector so it’s… We believe that, since our fundamentals are sound, we will be able to weather the external factors,” Lacierda said. With a report from Norman Bordadora