PHL shares lose 1% on GDP outlook, China yuan, US rate hike

A negative outlook on the country’s gross domestic product (GDP) in the second quarter, apart from the continuing impact of the Chinese yuan devaluation and the impending interest rate increase in the US, gnawed at market sentiment and caused a selloff in Philippine shares on Monday. 

The selling was lead by foreign funds, with the shares of Trans-Asia Petroleum Corp. losing P4.49 or 50 percent to P4.49 apiece. Pryce Corp. declined by P1.01 or 27.60 percent to P2.65 per share, the two biggest losers in the broader market.

Foreign investors were the net sellers, data from the PSE showed.

 

“Reports on the economic data showed that the gross domestic product could be slower in the second quarter. This discouraged investors from taking buy positions the market” Astro C. del Castillo, managing director at First Grade Finance Inc., said in a phone interview.

 

“Even Secretary Balisacan admitted second quarter GDP target wasn’t achieved,” he added.

 

So far, phe Philippines registered weaker exports as well as lower agriculture and manufacturing outputs.

The devaluation of the Chinese yuan continued to impact on share prices, considering that the Chinese currency has yet to appreciate from its recent weakening, Del Castillo noted.

 

The benchmark PSEi lost 71.60 points or 0.97 percent to close at 7,336.84, while the broader All Shares shed 53.56 points of 1.26 points at 4,191.43.

 

Over 1.588 billion shares, valued at P6.249 billion, changed hands. Losers led winners 144 to 38, while 43 issues were unchanged.

 

“Not much incentive from corporate earnings either,” Del Castillo noted, as almost all corporate earnings have been released.

 

Del Castillo noted the "ghost month" continued to weigh on the market and is expected to do so for some time.

The ghost month, which started on August 14 – and will last until September 12 – is the period when Chinese investors refrain from engaging the the market based on a supertitious belief that it is ominous. – VS, GMA News