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Friday, March 29, 2024

Stocks to move sideways amid Russia-Ukraine war

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Local stocks are expected to continue moving sideways over the near term as the positive developments in the domestic front are being tempered by the worsening Russia-Ukraine conflict.

Analysts said while the shift in the lower alert level and the positive earnings report boosted market sentiments, investors were also anticipating the negative impact of the Russia-Ukraine tension on the domestic economy.

“There is no real winner to war, and this applies to even equity holders as value chains get disrupted and macroeconomic fundamentals are upheaved. Brace for further broad-based volatility,” online brokerage firm 2TradeAsia.com said.

The International Monetary Fund said the already “serious” global economic impacts of the war in Ukraine would be “all the more devastating” should the conflict escalate.

“Price shocks will have an impact worldwide, especially on poor households for whom food and fuel are a higher proportion of expenses,” the international lender said.

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It said that emergency financial assistance requested by Ukraine amounted to $1.4 billion.

Security Bank’s Trust and Asset Management Group said despite the external developments, the Philippine Stock Exchange index, the 30-company benchmark, may hit the 8,000 mark by the end of the year as companies adapt to the new normal.

“With listed companies being able to adapt to the new normal, this has made them more resilient to lockdowns, allowing both local institutional and retail investors to be more comfortable in increasing investments in the stock market. This is reflected in the continued recovery of the PSEi every time a sell-off occurs,” Basil John Go, head of equities at Security Bank Trust and Asset Management Group, said.

Go said despite the optimism, several scenarios could affect the bullish outlook on the stock market, such as new deadly COVID-19 variants, higher-than-normal inflation, a more hawkish Federal Reserve that could lead to higher-than-expected interest rates, an escalation of the Russia-Ukraine conflict and the possibility of having a challenging election season.

The PSEi rose 1.8 percent last week to close at 7,342.01 while the broader all-share index climbed 1.37 percent to 3,895.52. With AFP

Foreign investors were net buyers last week by P149 million as average daily value turnover slid to P8.1 billion from previous week’s average of P9.9 billion.

Top price gainers lask week were Semirara Mining and Power Corp. which soared 27.6 percent to P31.90, DMCI Holdings Inc. which climbed 11.5 percent to P9.20 and Petron Corp. which advanced 8.3 percent to P3.66.

Heavy losers included Emperador Inc. which retreated 8.04 percent to P18.30, Globe Telecom Inc. which dropped 4.7 percent to P2,570 and Converge Information and Communications Technology Solutions Inc. which declined 3.3 percent to P26.05. With AFP

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