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Sunday, May 26, 2024

Market upbeat, weighs looser quarantine rules

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Shares price are expected to move sideways this week with an upward bias on expectations of a further easing of quarantine restrictions starting in June.

Analysts said investors are anticipating looser mobility restrictions with declining COVID-19 cases. They expect also the government’s vaccination program to accelerate with the arrival of more vaccines starting next month.

“Early next week, the public is waiting for the applied quarantine scheme for June, while maintaining the MECQ (modified enhanced community quarantine) is expected, any messaging for second half of the year easing should support the recent rally,” online brokerage firm 2TradeAsia.com said.

The upcoming initial public offering of Monde Nissin Corp., which will be the country’s largest share sale, can also boost trading activity this week.

Monde Nissin, which will raise P55.89 billion in proceeds, will be listed on the main board of the local bourse on June 1.

Meanwhile, investors will monitor the release of the May inflation rate late this week amid the steady rise in oil prices.

The bellwether Philippine Stock Exchange last week jumped 475 points to 6,674.51 while the All Shares Index surged 5.33 percent to 4,047.48.

The market rallied after investors welcomed the announcement of S&P to keep the Philippines’ credit rating at BBB+ and the possible easing of quarantine restrictions in June.

All sectoral indices ended in green led by holding firms (+9.5 percent), property (+9.09 percent) and industrial (+4.8 percent).

Foreign investors ,however, were net sellers for the week by P7 billion, while the average daily value traded rose to P11.9 billion from the previous week’s average of P5.3 billion.

Weekly top price gainers were JG Summit HIldings Inc., which advanced 17.8 percent to P58.20, Aboitiz Equity Ventures Inc., which climbed 15.1 percent to P40, and Ayala Corp., which jumped 11.3 percent to P779.

Weekly top price losers were First Gen Corp., which declined 4 percent to P28.70, First Philippine Holdings Corp., which dropped 2.9 percent to P68, and GMA Network Inc., which fell 2.8 percent to P8.92.

Meanwhile, Wall Street stocks shrugged off data showing increased US inflation, finishing modestly higher  Friday ahead of a holiday weekend, while European equities gained despite disappointing French economic data.

A key US inflation index climbed 3.6 percent in April compared to the same month in 2020, according to government data, the largest jump since September 2008.

The rise comes as economists debate whether government stimulus and loose Federal Reserve policy will cause the world’s largest economy to overheat.  

The Fed has pledged to maintain low lending rates and its massive bond-buying program until inflation is holding steady above 2 percent and employment fully recovers.

However, the market took the data in stride, suggesting investors share “an abiding belief that the high inflation prints will be transient, as the Fed has suggested,” said Briefing.com analyst Patrick O’Hare.

All three major indices finished with gains for the week. US markets will be closed Monday for the Memorial Day holiday. With AFP

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