Stocks rise as World Bank maintains GDP forecasts

STOCKS closed higher on Thursday after the World Bank said it was upbeat on the Philippine economy this year, even as inflation and new variants of the 2019 coronavirus disease (COVID-19) threaten the outlook.

The 30-member Philippine Stock Exchange Index (PSEi) rose 92.62 points, or 1.28%, on Thursday to close at 7,307.75, while the broader all-shares index gained 40.20 points, or 1.05% 3,870.11 rose.

“The local stock market closed higher as investors appear to have taken the World Bank’s outlook for the Philippine economy positively,” said Timson Securities, Inc. trader Darren Blaine T. Pangan in a Viber message.

In its latest Global Economic Prospects report released Tuesday, the World Bank said the Philippines could return to its pre-pandemic performance this year, but the rapid spread of the Omicron variant could come with risks of inflation, growing debt, and increased income inequality in emerging and developing countries.

The multilateral lender kept its growth forecast for the Philippine economy at 5.9% for 2022 and 5.7% for 2023, below the 7-9% and 6-7% growth forecasts set by economic managers for both years.

The World Bank expects the Philippine gross domestic product (GDP) to have grown by 5.3% in 2021, which is within the government’s target of 5-5.5%.

“Investors continued to bet on the Philippines’ recovery as high US Consumer Price Index (CPI) numbers prompted them to return to the PSEi,” Luis A. Limlingan, director of sales at Regina Capital Development Corp., said in a Viber message.

The CPI rose 0.5% last month after rising 0.8% in November. In the 12 months to December, the CPI rose 7.0%, Reuters reported. That was the largest annual increase since June 1982, following a 6.8% rise in November.

Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financial, Inc., said Thursday’s extended rally in the local stock market reflected investors’ hopes that the National Capital Region would not be placed under a stricter lockdown.

The health department reported 34,021 new COVID-19 cases on Thursday, bringing the number of active infections in the country to 237,287.

All industry indexes ended in the green on Thursday, led by mining and oil, which climbed 221.37 points, or 2.24%, to 10,082.12.

Financials gained 28.80 points, or 1.74%, to close at 1,678.44; Services rose 30.54 points, or 1.55%, to 1,994.86; Industrials rose 141.35 points, or 1.37%, to 10,402.87; Holding companies added 65.61 points, or 0.93%, to close at 7,091.31; and real estate rose 19.10 points, or 0.59%, to 3,234.07.

Value turnover grew to P7.2 billion with 1.50 million shares changing hands from P5.95 billion with 854.66 million issues traded the previous day.

The promoted teams outnumbered the relegated teams, 131 to 60, while 50 names closed unchanged.

Net overseas purchases rose to P659.73 million from P313.75 million recorded on Wednesday. — MCL With Reuters

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