PSE: Companies to continue expansion amid shaky market conditions

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Metro Manila (CNN Philippines, July 13) — The stock market closed just shy of the 7,400 point mark on Friday, posting steady recovery over the week.

The Philippine Stock Exchange (PSE) index ended at 7,399 points, 0.66 percent up from the previous day's close. The market opened at 7,225.95 points on Monday as it tried to recover from the one-year low of 6,986.88 points recorded on June 25.

PSE President and CEO Ramon Monzon said he expects the market to stay at the 7,200 to the 7,400 level in the coming days.

"Probably we'll hover around this area for the next few months unless something happens in the trade war or some other global development that could affect markets all over the world," Monzon said in an interview with CNN Philippines' Business Roundup.

The looming trade war between world's first and second largest economies -- the United States and China -- has negatively affected stock trading for the past few days.

The PSE also took a huge dip after the latest inflation report, where commodity prices reached a five year high at a 5.2 percent inflation rate in June.

The Bangko Sentral ng Pilipinas (BSP) also reported Thursday that the $901.78 million foreign portfolio investments in June was completely wiped out by the approximately $1.426 billion pulled out by investors from the stock market.

The PSE executive said that there are a variety of reasons why foreign investors exited from the Philippine market, including the depreciation of the Philippine Peso and the high inflation rate.

"Hopefully the BSP is addressing these problems and I think there should be another rate increase sometime in August. Hopefully it would help arrest the inflation problems we are encountering right now," Monzon said.

He added that should the third quarter gross domestic product (GDP) announcement be favorable, more investors could be attracted back to the market.

Nevertheless, Monzon noted that more companies are continuing to expand through the stock market, and that the PSE is close to reaching its ₱200 billion capital raising target for the year.

"We were surprised at the state of the capital raising activities considering the condition of the market," said Monzon, adding that the PSE had raised ₱150 billion for the first half of the year.

"It seems that companies are continuing with their expansion regardless of what seems to be the ails affecting the market," said Monzon.