The Philippine Stock Market - June 8, 2009

There are concerns that the Philippines might slide into recession. The commonly used definition of a recession is two consecutive quarters of negative growth rate. In the Philippines, it is seen as two consecutive quarters of growth below the population growth which is currently at around 1.92%. The 1st quarter growth rate for 2009 only reached +0.4%.

The 1Q09 GDP figure suggests a -2.3% decline from the 4Q08 numbers, the lowest for the past 20 years

*This highlights the threat of a recession that was assigned almost zero possibility for the Philippines
*On the demand side, Personal Consumption Expenditure (PCE) barely grew +0.8% in 1Q09; this is a massive decline from +5.1% in 1Q08. PCE remains a major GDP driver, accounting for 77% of the country’s total GDP.
*As a result, per capita GDP fell by 1.5 percent from last year, the first time since the third quarter of 2001.
*Per capita GNP still grew, however by 2.4 percent from 4.4 percent while per capita PCE declined by 1.1 percent from its year ago growth of 3.1 percent.

On the production side: Industry sector showed a 2.1% contraction (from +2.8% last year) dragged by the manufacturing sector (68% of Industry value)

DEMAND SIDE
1Q09
PCE +0.8%
Govt. Exp +3.8%
Capital Form. -16.5%
Exports -18.2%
Imports -19.2%

PRODUCTION SIDE
1Q09
Agri, Fish,Forestry +2.1%
Industry Sector -2.1%
Service Sector +1.4%
GDP +0.4%
NFIA +40.8%
GNP +4.4%


GIR rose to $39.5B in May
*Gross International Reserves (GIR) rose to $39.5B as of May
*In April, GIR stood at $39.3B revised downward from the $39.5B reported by BSP
*Increasing inflow of investments in securities and equities was partly the reason the peso has strengthened in May than the previous month, moved into 47-to-a dollar territory
*GIR in May is estimated to cover at least 6 months’ worth of imports
*BSP’s conservative forecast for GIR is at $37.5B by end of 2009

****SB Equities research


A new round of an economic stimulus plan is being suggested by Philippine Economic Adviser Joey Salceda in order to boost public consumption.

US unemployment for May was at 345,000. This is the lowest in several months. But there are concerns that this figure may again rise because of the GM bankruptcy.

The local equities market moved in and out of positive territory as investors now look for directions and lets the market consolidate. There are also concerns on the impending rally against Charter Change later this week.
The Philippine Stock Exchange Index (PSEi) moved within a 30-point range and manages to stay above the 2500 level.

PSEi previous close - 2528.68 (June 5)

time----------change------------PSEi
9:31---------up 5.94----------2534.62
9:34------------9.91
9:39-----------10.15----------2538.83 (day's high)

9:44---------up 5.87
9:51------------4.78
9:56------------2.16
10:05-----------1.12

The market has completely reversed its trend.

10:07------down 1.61
10:16-----------2.05
10:25-----------6.48
10:39----------14.97
10:57----------18.66

11:06-----down 15.87
11:16----------18.49
11:19----------19.23----------2509.45 (day's low)

11:32-----down 16.17
11:34----------15.08
11:37----------11.36
11:55-----------9.16
11:58-----------8.86
12:01----------10.95---------2517.73 (-0.43%)
Market Close.

Value turnover: PhP 2.605 bn
Cross transactions: PhP 694 mn

Advancers 36
Decliners 85
Unchanged 42

Sectoral Indices.
M-O -3.51%
Holdings -0.97%
Industrial -0.77%
Financial -0.36%
Services +0.06%
Property +0.31%

The Day's Top Gainers:
MHC: PhP 0.36; +33.33%
AT: PhP 7.10; +14.52%
COL: PhP 8.70; +10.13%

The Day's Biggest Decliners:
ABB: PhP 2.50; -28.57%
ZHI: PhP 0.33; -15.38%
PERC: PhP 7.00; -12.50%

At mid-day:
Asian equities markets were mixed.
The Philippine Peso was at PhP 47.429 vs US$ 1.00.


CLOSING PRICES OF SELECT STOCKS (as of June 8, 2009):
ABA: PhP 0.91
ALI: PhP 9.60
DGTL: PhP 1.34
EDC: PhP 4.00
EIBA: PHP 0.26
FLI: PhP 0.85
GEO: PhP 0.71
GOB: PhP 0.17
JOH: PhP 1.30
LOTO: PhP 10.00
MEG: PhP 1.22
MPI: PhP 5.90
MUSX: PhP 0.133
PAX: PhP 2.65
PX: PhP 6.70
SPH: PhP 2.85
SUN: PhP 0.55
TA: PhP 1.06
UW: PhP 0.11
V: PhP 1.08
WEB: PhP 0.050