Philippine stock market outpaces Asian peers

The Philippine stock market is Asia’s fastest growing so far this year, according to the local bourse.

In a presentation during the 37th Federation of Asean Economic Associations Annual Conference last Friday, Philippine Stock Exchange president Hans Sicat said the PSE composite index (PSEi) has risen by 27.78 percent through November 27, outpacing even China, which was Asia’s fastest-growing economy on growth of 7.7 percent in the third quarter.

However, China’s two main stock indices – the Shanghai composite and Shenzhen composite – contracted 9.4 percent and 11.7 percent, respectively, since the start of the year, Sicat said.

At the close of trading last Thursday, the PSEi registered a new all-time high of 5,640.45, rewriting records a 32nd time this year.

In the July-September period, the Philippines was Asia’s second best-performing economy, but was Asean’s fastest after clocking in growth of 7.1 percent.

Trailing the PSEi was the Stock Exchange of Thailand index, which has risen by 26.5 percent so far this year. The Thai economy grew 3 percent in the third quarter, or less than half the speed of the Philippine economy.

India's NSE Nifty and BSE Sensex were the third and fourth fastest-growing Asian bourses, registering 23.8 percent and 21.9 percent increases, respectively (see table below).

Source: Hans B. Sicat, The Philippines Stock Exchange Inc.: Regional Integration of Financial and Capital Markets in the ASEAN as presented at the 37th FAEA Annual Conference, November 29, 2012 held in PICC, Manila.

Economist Nonoy Oplas, who writes a column for InterAksyon.com, said the Philippine stock market's ascent indicates that economic growth would reach up to 7 percent in the fourth quarter.

If the country's high-growth track is sustained in the final three months of the year, then this would be the second quarter in a row that actual economic expansion bucks the National Statistical Coordination Board's (NSCB) leading economic indicator (LEI).

The NSCB's LEI pointed to a slide to 0.016 for the fourth quarter from the 0.1312 in the previous three-month period.

The third-quarter LEI also had fallen from the second-quarter figure, failing to anticipate the Philippine economy's strong showing in the July-September period.

The LEI tracks 11 economic indicators, including the PSEi, which has been a positive contributor to the NSCB leading index.-Interaksyon (November 30, 2012 3:53PM)