Philippine stocks surged on Monday, a dramatic rebound fueled by investors seizing opportunities after a significant sell-off the previous week. Despite a cloud of political uncertainty surrounding a growing corruption scandal, bargain-hunters propelled the market upwards.
The Philippine Stock Exchange Index (PSEi) leaped 3.48%, adding 194.77 points to close at 5,779.12, effectively erasing Friday’s sharp losses. This broader market rally extended to the all-share index, which rose 0.63% to 3,280.8.
Analysts attributed the gains to opportunistic buying, capitalizing on the depressed prices following Friday’s downturn. However, a sustained upward trend remains uncertain, hinging on resolving concerns about the nation’s economic trajectory.
The rebound occurred against a backdrop of increasing scrutiny over alleged irregularities in flood-control contracts, a scandal that is intensifying pressure on the current administration. Calls for accountability among implicated officials have added to the complex economic landscape.
A government-led anti-graft campaign, initiated in August, has inadvertently slowed public spending and contributed to a softening of economic output. This slowdown is reflected in recent GDP figures.
The Philippine economy expanded by 4% in the third quarter, marking its slowest growth rate since 2021. With a nine-month average of 5%, the country is currently lagging behind its full-year growth target of 5.5% to 6.5%.
President Marcos has publicly stated that the crackdown on corruption is actually bolstering trust in the country’s economic management, claiming a restoration of business confidence. He recently announced that individuals linked to the flood-control scandal will face legal consequences before the year’s end, further raising the political stakes.
Monday’s trading session showcased widespread gains across multiple sectors. Financials led the charge with a substantial 4.73% increase, driven by renewed interest in select banking stocks.
Property firms also experienced significant growth, rising 4.14%, while the services sector added 2.97%. Holding firms and industrials saw gains of 2.07% and 1.79% respectively. The mining and oil sector was the sole exception, declining slightly by 0.3%.
Market breadth was overwhelmingly positive, with 115 stocks advancing compared to 74 declining issues, and 59 remaining unchanged. This indicates a broad-based improvement in investor sentiment.
Trading volume reached P6.76 billion, an increase from Friday’s P6.26 billion, although the number of shares traded decreased to 1.12 billion from 1.68 billion. Net foreign selling widened to P171.2 million, suggesting continued caution among international investors.
Global markets offered a mixed signal, with Wall Street ending the previous Friday in a state of uncertainty as investors debated the possibility of delayed interest rate cuts by the US Federal Reserve. The Nasdaq showed resilience, while the S&P 500 experienced a slight dip.
Investors are now keenly focused on the upcoming earnings report from Nvidia Corp., a key player in the artificial intelligence sector, to assess the sustainability of current valuations in AI-related stocks.
