The Market Monitor Minding the Nation's Business
By Riza Lozada
The Philippine Stock Exchange Inc. (PSE) reported a net income of P164.73 million in the first quarter of 2016, down by 13.9 percent from a year ago, due mainly to lower trading-related income and service fees as the stock market registered lower total value turnover during the quarter.
Operating revenues also experienced a decline of 18.3 percent from P320.66 million during the first quarter of 2015 to P262.07 million in the same period this year.
Operating revenue components like trading-related income and service fees went down by 23.3 percent and 36.6 percent respectively. Average daily value turnover in the stock market from January to March 2016 fell by 37.6 percent to P6.78 billion from P10.87 billion during the same quarter in 2015.
“Global equities experienced volatility in the first quarter, and for emerging markets like the Philippines, it meant lesser foreign fund inflows. Locally, the pendency of the national elections kept some investors and potential issuers at bay,” PSE President and CEO Hans Sicat said.
The decline in net income was mitigated by controlled expenses as well as the increase in PSE’s other income source. Total expenses were reduced by 9.0 percent to P131.18 million from P144.20 million in the same period a year ago.
Trading activity has been picking up following the conduct of what many investors deem as peaceful and credible elections.
We are also anticipating listing activities that were initially put on hold to proceed by the second half of the year,” Sicat added.
Share prices stayed below the 7,300 level last Friday as the market continued to correct following its post-election rally and dragged by prospects for higher United States (US) interest rate.
The barometer Philippine Stock Exchange index (PSEi) declined 128.30 points or 1.73 percent to 7,299.03 from previous day’s 7,427.33 finish.
Justino Calaycay Jr., head of research and marketing at A&A Securities Inc., said the market was correcting in the past few day after a six-day run after election which gained over 500 points or 6 to 7 percent.
“The (President-elect Rodrigo) Duterte euphoria, the first wave (of enthusiasm) had died down… The euphoria is over now, but it could again happen,” he said, referring to the incoming President’s inauguration ceremony and his first State-of-the-Nation Address (SONA) in July.
Calaycay said Friday’s trading was also haunted by the prospect that the Federal Re-serve will increase interest rates in June or July.
The property sector’s 2.68-percent losses led the market’s decline. The mining and oil counter rose slightly.
Volume of transactions reached 1.75 billion shared valued at Php7.21 billion. Decliners swamped advancers, 140 to 45, while 42 issues unchanged.