Share prices are expected to return to sideways trading after last week’s technical rebound as investors remain wary about the recovery of the domestic economy.
With inflation likely to increase further, analysts said investors were concerned that high prices could derail the growth of the economy. The investors are also waiting for the new president to unveil his economic programs for the country.
“The near term risk remains tilted to the downside. For one, inflation has yet to peak and the new president that yet to define his economic plan and name his economic managers,” said BDO Unibank chief market strategist and first vice president Jonathan Ravelas.
Renewed concerns about a possible surge in COVID-19 cases over the near term period following the detection of new variants in the country could also affect market sentiments.
The Department of Health on Saturday said the Philippines reported its first case of the highly transmissible COVID-19 Omicron sub variant BA.4.
The Philippine Stock Exchange Index last week jumped 5.8 percent to 6,746.33 points on bargain hunting after the market’s recent decline, while the broader All Shares Index climbed 4.5 percent to 3,613.24.
All sectoral indices ended in the green. Mining and oil rose 8.7 percent; property advanced 6.3 percent; industrials gained 5.8 percent; financials improved 5.6 percent; and services rose 3.2 percent.
Foreign investors, however, were still net sellers by P3.7 billion, while the average daily value traded stood at P12 billion, up from the previous week’s average of P7.7 billion.
Weekly top price gainers were Semirara Mining and Power Corp., which climbed 15 percent to P32.50; Globe Telecom Inc., which advanced 14 percent to P2,506; and Aboitiz Power Corp., which rose 10.5 percent to P31.50.
Weekly top price losers were Phoenix Petroleum Philippines Inc., which dropped 6.4 percent to P9.49; Bank of Commerce, which dipped 5.7 percent to P11.12; and Alliance Global Group Inc., which fell 5.7 percent to P10.88.
Meanwhile, Asian and European stocks rebounded Friday on China’s interest rate cut, but US equities gyrated amid fears that sky-high inflation will spark a recession.
“Markets have been looking for an excuse to bounce, and a China rate cut provided the reason,” IG analyst Chris Beauchamp told AFP.
The People’s Bank of China announced it would lower its five-year loan prime rate—a key interest rate governing how lenders base their mortgage rates—to 4.45 percent from 4.6 percent.
The move is in contrast to other major central banks—like the US Federal Reserve and the Bank of England—t]hat are raising borrowing costs to combat rocketing consumer prices.
The Chinese move sparked optimism among traders that it could boost the world’s second-largest economy from its COVID-induced stupor.
“The rate cut announced by the PBOC is obviously good news and is clearly targeted at revitalizing the ailing property market which continues to suffer due to the crackdown last year and COVID lockdowns this year,” said Craig Erlam, senior market analyst at OANDA. With AFP