Market investors wary of weaker economy

Share prices are expected to stay sideways this week  on thin trading as investor sentiment on the domestic economy remains tepid.

BDO Unibank Inc. chief investment strategist Jonathan Ravelas said investors are waiting for signs that demand is picking up as as the government further opens up the economy.

Ravelas, however, noted that the slowdown in the inflation rate in September to 2.3 percent indicated demand remained soft and that consumption was still anemic.

“The week’s close at 5,931.61 highlights further consolidation within the 5,700/6,000 levels in the near-term. This comes after the market failed to stay above the 6,000 level. Expect a retest of the 5,700 levels,” Ravelas said.

While the fourth quarter is seasonally the strongest period due to holiday spending, analysts are still expecting weak economic growth due to the impact of the pandemic.

The start of the offering period for shares of Converge ICT Solutions’ P29-billion initial public offering could affect liquidity in the stock market.

The Philippine Stock Exchange Index last week closed 67 points lower to 5,931.61 on worries that the passage of the 2021 national budget could be delayed because of squabble in the Lower House leadership.

Except for mining and oil (+12.05) and holding companies, (+0.05 percent), other sector indices ended in the red led by property (-2.4 percent) and services (-1.59 percent).

Foreign investors were still net sellers for the week by P1 billion.

Weekly top price gainers were led by ABS-CBN Corp., which jumped 102 percent to P14.32; Da Vinci Holdings which rose 43 percent to P4.70; and Lopez Holdings Inc. which climbed 23 percent to P2.79.

Weekly top price losers included Robinsons Land Corp., which declined 3.2 percent to Pec14.74; SM Prime Holdings Inc., which fell 3.1 percent to P29.10; and Robinsons Retail Holdings Inc., slipped 2.8 percent to P63.65.

Global stocks, meanwhile, mostly rose Friday amid increased hopes for a US stimulus package following the latest statements from President Donald Trump and rising confidence about coronavirus therapeutics.

Major US indices finished higher for a third straight session, with the tech-rich Nasdaq jumping 1.4 percent as the White House again shifted its stance on the talks.

Earlier, European bourses also climbed despite rising coronavirus cases in the continent.

After markets tanked on Tuesday following President Donald Trump’s abrupt move to end stimulus talks, investors have cheered his about face in subsequent days that’s seen him calling for a deal.

The White House on Friday beefed up its offer, proposing a $1.8 trillion package as Trump himself said on a radio show that he favored an even larger package.

But Senate Majority Leader Mitch McConnell said there was not enough time to complete the talks before the election.

Still, analysts said the gains reflected confidence there would be a package soon.

Markets also cheered a write-up in the New England Journal of Medicine reporting that Gilead Sciences’s remdesivir drug resulted in “consistent, clinically meaningful improvements” in coronavirus patients, the latest positive indicator about a leading treatment. With AFP