AFTER soaring three percent on Wednesday, the Philippine Stock Exchange index (PSEi) slightly dampened yesterday, and this is projected to close lower today and even next week.
The PSEi dropped 71.48 points or 0.97 percent to close at 7,325.04.
Unicapital Securities business development officer Marco Niño Velasco believes “profit taking and possible fear in case things get bad during the weekend caused the decline, but noted that it would not fall below the 7,000-mark.
The Cebu-based stockbroker described the 6.50-percent rally in stocks in the past two days (Tuesday and Wednesday) being “too high” and “steep.”
On Wednesday, two days after the election, Philippine stocks posted the highest close since August 2015 when PSEi earned 221 points or 3.09 percent to close at 7,369.52, while all shares surged by 116.07 points or 2.72 percent to 4,388.31.
“The PSEi rally was because of different factors. One was Japan’s finance minister’s decision to control the rise of yen and partly because of the peaceful elections and smooth transition,” said Velasco.
Cebu Bankers Club (CBC) president Maximo Rey Eleccion, for its part, said market players were satisfied with the outcome of the elections, describing it as generally peaceful and credible, which had helped the local bourse recover.
In addition, the CBC president said the clearer economic plans of presumptive president Rodrigo Duterte eased market jitters.
Duterte, who has a lead of over six million votes over former interior secretary Manuel Roxas II, earlier spoke of his economic stance on foreign ownership in corporations, allowing a 70-percent stake across all industries and leasing out of land by 40 years to foreign developers. The presumptive president has also expressed his preference for hard investments over hot money.
Eleccion said the names of possible cabinet Secretaries that have surfaced might have also posted confidence to the market.
“Names floated to be part of his cabinet already have the track record and are perceived to have performed well in their previous positions,” the CBC president said.
Eleccion, quoting Standard & Poor’s (S&P) Global Ratings, said the international credit rating agency maintained its BBB ratings, a notch above investment grade.
“Philippines is not affected by change in leadership. S&P believes the fiscal and economic policies under the Duterte administration would remain supportive of the investment grade rating in the Philippines,” the local banker said.