Stocks rally on stimulus hopes, MSCI rebalancing – BusinessWorld

PHILIPPINE shares rallied for a third straight day on Thursday as the possibility of the government approving another round of stimulus and the MSCI rebalancing boosted market sentiment.

The 30-member Philippine Stock Exchange index (PSEi) gained 323.90 points or 5.1% to close at 6,665.14 on Thursday, while the all shares index also went up by 135.53 points or 3.47% to finish at 4,034.92.

“The local market rallied this Thursday… on the back of optimism towards more fiscal stimulus for the Philippine economy,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

The House of Representatives approved the second reading House Bill 9411 or the Bayanihan to Arise as One Bill, it is due for third and final reading next week.

“The bill, if passed into law and implemented, is seen to boost aggregate spending which in turn would help in the economic recovery,” Mr. Tantiangco added.

Meanwhile, the rebalancing of the MSCI index also improved market sentiment.

“The index continued its hot streak with the effect of the MSCI rebalancing taking place and window dressing coming into full swing, while sentiment overseas was swayed as investors focused on retailers, travel, and leisure companies,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a separate Viber message.

“This is the reversal that we have been waiting for and prices may continue higher as more investors gain confidence,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail.

All sectoral indices closed higher on Thursday. Holding firms climbed 485.55 points or 7.65% to finish at 6,829.81; property increased by 187.24 points or 6.13% to 3,239.24; industrials gained 322.47 points or 3.74% to end at 8,923.89; financials went up by 10.92 points or 0.78% to 1,405.48; mining and oil improved by 62.25 points or 0.66% to close at 9,394.89; and services inched up by 3.47 points or 0.23% to 1,482.18.

Value turnover nearly doubled to P23.81 billion with 2.29 billion shares switching hands on Thursday from the P13.09 billion with 1.26 billion issues traded on Wednesday.

Advancers trumped decliners, 145 versus 60, while 39 names closed unchanged.

Net foreign selling fell to P889.04 million on Thursday from the P6.48 billion in net outflows logged on Wednesday.

Philstocks Financial’s Mr. Tantiangco said he expects the index to move sideways on Friday as the market’s recent rally may cause investors to pocket some of their gains.

“This makes it susceptible to profit taking which we may see [on Friday,]” Mr. Tantiangco said. “Still, prospects of more fiscal stimulus amid the developments with the Bayanihan III Bill may help sustain positive sentiment.” — Keren Concepcion G. Valmonte