Market investors looking for catalysts to lift stocks

Share prices are expected to continue trading within a narrow range, with investors opting to stay on the sidelines on the lack of catalysts.

BDO Unibank Inc. chief investment strategist Jonathan Ravelas said traders and investors were awaiting for more concrete measures to further restart the economy before actively participating in the equities market.

Measures that could boost investor confidence on the market include the stimulus package or the passage of key measures to support government revenues.

The Congress last week approved the Bayanihan 2 bill earmarking P165 billion to a stimulus package to support the recovery of distressed micro and small and medium enterprises.

While second quarter earnings showed significant declines in profits for most listed companies, online brokerage firm 2TradeAsia.com said expectations of a better third-quarter financial performance is not unreasonable

“Overall, there are signs of life, albeit not the grand and uniform recovery investors would have envisioned,” the brokerage firm said.

The Philippine Stock Exchange Index last week slipped 1.2 percent to 6,005.40 points, while the broader All Shares Index fell 0.6 percent to 3,573.06.

Four of the six sectoral indices ended in the red, namely mining and oil, (-3.2 percent), financials (-2.7 percent), property (-2.1 percent) and industrial (-2.1percent).

Services rose 0.7 percent while holding firms added 0.03 percent.

Foreign investors were net sellers for the week by P1.9 billion, while the average daily value traded declined to P5.3 billion from the previous week’s average of P10.7 billion.

Weekly top prize gainers were Macay Holdings Inc., which jumped 20.6 percent to P8.79; AREIT Inc., which increased 7.5 percent to P25.90; and Alliance Global Group Inc., which advanced 5.6 percent to P6.20.

Weekly top price losers were Emperador Inc., which declined 8 percent to P10.10; Ayala Land Inc., which dropped 5.8 percent to P31.35; and Metro Pacific Investments Corp., which fell 4.2 percent to P3.21.

Meanwhile, the euro, which hit two-year highs against the dollar this week, fell Friday as data showed eurozone economic activity slowing in August against a backdrop of rising coronavirus cases.

The pound also fell against the dollar as the EU and Britain traded blame for the lack of progress after the latest round of post-Brexit trade talks, with Brussels warning that a deal looked unlikely.

Sterling is being punished “by Brexit talks which seem to be going nowhere,” said Neil Wilson, analyst at Markets.com. With AFP

“The two sides are still far from reaching agreement on key terms” of their post-Brexit relationship. 

In the eurozone, IHS Markit’s closely-watched PMI index fell to 51.6 points from 54.9 points in July, holding just above the key 50-point threshold indicating growth.

“The euro’s rally has come to a halt this week on growing concerns that coronavirus is coming back strongly in parts of Europe and will hurt the economic recovery,” said Fawad Razaqzada, market analyst with ThinkMarkets.

European stock markets ended the week in the red, with London’s FTSE slipping 0.2 percent on Friday, Frankfurt’s DAX 30 shedding 0.5 percent and Paris’s CAC 40 down 0.3 percent.

But the gloom did not extend across the Atlantic, where Wall Street ended the week with new closing records for the S&P 500 and Nasdaq, while the Dow rose 0.7 percent.  With AFP