PHILIPPINE SHARES may rebound on Thursday on expectations that economic growth picked up in the fourth quarter of 2024.
On Tuesday, the Philippine Stock Exchange index (PSEi) fell by 0.7% or 43.41 points to close at 6,153.47, while the broader all shares index dropped by 0.44% or 16.33 points to end 3,623.52.
This was the PSEi’s worst finish in over 14 months or since it closed at 6,110.88 on Nov. 14, 2023. The main index is approaching bear territory as it is now down by 19% from its latest intraday high of 7,604.61 recorded on Oct. 7, 2024.
Philippine financial markets were closed on Jan. 29 (Wednesday) for the Lunar New Year holiday.
Analysts said Philippine stocks could recover when trading resumes on Thursday, although cautiousness could persist.
“We could see a possible upward correction. Philippine gross domestic product (GDP) growth for the fourth quarter of 2024 is expected to slightly pick up from 5.2% in the third quarter and would be an important catalyst for the local stock market,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
The recovery on Wall Street following a tech-led selloff could also support the local stock market, he said.
Technology stocks led gains in Asia-Pacific markets on Wednesday, tracking advances on Wall Street overnight as investor angst ebbed over the emergence of a low-cost Chinese artificial intelligence model that some see rivaling US dominance of the industry, Reuters reported.
“The market will languish in bearish mode due to jitters over GDP data disappointment,” First Metro Investment Corp. Head of Research Cristina S. Ulang said in a Viber message.
The Philippine Statistics Authority will release fourth quarter and full-year 2024 GDP data on Jan. 30 (Thursday).
A BusinessWorld poll of 18 economists and analysts yielded a median estimate of 5.8% for fourth-quarter GDP growth, faster than 5.2% in the third quarter and matching the 5.8% expansion in the same quarter in 2023.
The poll also yielded a median growth forecast of 5.7% for full-year 2024, below the government’s revised 6-6.5% goal. Still, this would be faster than the 5.5% economic expansion logged in 2023.
Philippine GDP growth averaged 5.8% in the first nine months of 2024.
Mr. Ricafort added that the market will also assess the US Federal Reserve’s policy statement due overnight, as this could provide hints on their future policy path. He placed the PSEi’s support at 6,000 and resistance at 6,500-6,600.
The Fed was widely expected to leave its benchmark interest rate unchanged at the 4.25%-4.50% range at its Jan. 28-29 review amid lingering inflation risks, especially with US Donald J. Trump’s tariff threats.
The US central bank has cut rates by 100 basis points since it began its easing cycle in September. — R.M.D. Ochave with Reuters
