Market monitoring Taal situation

Share prices are expected to continue with their sideways movement this week on concerns about the possible impact of the Taal Volcano eruption on the economy.

Philstocks Financial Inc said the investors were weighing the uncertainties brought about  by Taal volcano’s activities.

Improving developments overseas due to the signing of phase one trade deal between United States and China and the improving US economy, however, are expected to boost the local equities market.

First Metro Investments Corp. sees the Philippine Stock Exchange Index climbing to the 8,600-point to 8,900-point level this year, with corporate earnings  projected to grow by at least 10 percent.

The growth in corporate earnings will be supported by robust macroeconomic fundaments like low interest rates and the low inflation environment.

With consumer spending expected to continue to drive the economy this year, FMIC  chose JG Summit Holdings Inc., Ayala Land Inc., SM Prime Holdings Corp., Puregold Price Club Inc., Wilcon  Depot Inc. and Robinsons Retail Holdings Inc. as its stock picks for this year in terms of growth.

The PSEi last week fell 0.7 percent to 7,722.58, while the broader All Shares Index plunged 1.2 percent to 4,551.19.

Four of the six sectoral indices posted week-on-week gains, namely industrial which advanced 1.2 percent, financial which was up 1.1 percent and services and mining and oil index which rose 0.5 percent and 0.44 percent, respectively.

Holdings firms declined 2.1 percent while property dropped 1.9 percent on a week-on-week basis.

Foreign investors were net sellers for the week by P1.4 billion, while the average daily value traded improved to P7.4 billion from the previous week’s average of  P5.6 billion.

Weekly top price gainers were Fruitas Holdings Inc., which rose 11 percent to P1.61; Universal Robina Corp., which climbed 9.4 percent to P153.50; and Globe Telecom Inc., which advanced 5.9 percent to P2,098.

Weekly top price losers were DMCI Holdings Inc., which declined 10 percent to P6.36; San Miguel Food and Beverage Inc., which dropped 7.6 percent to P73.50; and ABS-CBN Corp., which fell 7 percent to P17.20.

Meanwhile, global equities rose on Friday, with Wall Street stocks ending at fresh records, as solid Chinese economic data brightened the global outlook following the landmark US-China trade deal earlier in the week.

European markets were all higher following signs the Chinese economy is stabilizing.

“China released some broadly positive economic reports, which has boosted sentiment around the globe,” said CMC Markets analyst David Madden.

Apart from a blip last week caused by the US killing of Iran’s top general, markets have had a strong start to the new decade, building on the rally of late 2019.

The gains have been fanned by the “phase one” trade agreement signed this week by the United States and China as well as signs of improvement in various economies, lower interest rates, government stimulus and easing Brexit concerns.

The prospect of a healthy batch of corporate earnings means there are hopes for further advances as well.

Topics: Stock Market , Philippine Stock Exchange Index , Philippine Stock Exchange , PSE , PSEi , Taal Volcano eruption
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