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Philippines: High inflation tames stock trades
MANILA, Philippines — The benchmark Philippine Stock Exchange index (PSEi) plunged by 91.46 points, or 1.17 percent, as the government reported yesterday a continued rapid increase in inflation.
The broader All Shares gauge was likewise in the red, shedding 24.85 points, or 0.53 percent, to finish at 4,635.59.
The sectoral indices likewise took a beating with only the property index managing to stay afloat.
The financials, holding firms and mining and oil were among the hardest hit. Yesterday’s decline still happened even as many conglomerates already announced positive second quarter and first half earnings results.
The culprit, traders said, was the 5.7 percent inflation in July, which was already at the high end of estimates.
The Philippine Statistics Authority reported yesterday that year-on-year inflation picked up to 5.7 percent, higher than the previous month’s 5.2 percent.
But the PSA said while the overall price level picked up, the month-on-month inflation eased to 0.5 percent in July, from 0.6 percent in the previous month.
“The current price pressures emanate mainly from supply-side factors. Addressing supply constraints to curb inflation is the utmost priority of the government,” the economic team said, in a move to assuage concerns of investors.
They said the higher year-on-year inflation reading was brought about by the spike in the prices of food and non-alcoholic beverages.
July’s inflation falls within the upper band of the Bangko Sentral ng Pilipinas’ (BSP) forecast range of 5.1-5.8 percent.
The Economic Team expressed confidence that inflation will taper off towards the end of 2018, echoing the BSP’s near-term outlook.
Meanwhile, total value turnover was thin at P5.216 billion and market breadth was negative, 103 to 99 while 38 issues were left unchanged.
Source: https://www.philstar.com/business/2018/08/08/1840539/high-inflation-tames-stock-trades#2F0jr8dBGXWASGCK.99