Chinese virus weighs on market

Share prices are expected to move sideways this week due to discouraging developments both here and abroad.

Overseas concerns about the spread of China’s coronavirus is expected to affect market sentiments as the death toll in China increased to 56, while cases turned up in other countries as well, including Japan, Taiwan, South Korea and Singapore.

In the local market, heightened regulatory risk is weighing as the Duterte administration vowed to review all deals signed with the private sector that may have placed the taxpayers at a disadvantage.

The government is currently reviewing the alleged onerous water concession contracts of Maynilad Water Services Inc. and Manila Water Services Inc.

It also uncovered a lease contract with onerous terms between Chevron Philippines (formerly Caltex Philippines) and a subsidiary of National Development Co.

“Investors’ collective risk-off stance in light of a plethora of discouraging developments both at home and overseas poses a stiff challenge to the optimism with which a new year is usually met,” said Justino Calaycay, research head of Philstocks Financial Inc.

The Philippine Stock Exchange Index fell 1.3 percent last week to 7,623.41, while the broader All Shares Index declined 0.6 percent to 4,523.57.

Except for the industrial index which registered a week-on-week gain of 2.5 percent, all other sub-indices ended in the red led by mining and oil, which declined by 2.15 percent, financials which dropped 2 percent and property which dipped 1.8 percent.

Services and holding firms also posted week-on-week declines of 1.7 percent and 1.2 percent, respectively.

Foreign investors were net sellers for the week by P1.65 billion, while the average daily value traded stood at P6.7 billion from the previous week’s average of P7.4 billion.

Weekly top price gainers were Axelum Resources Corp. which rose 27.3 percent to P3.60; Fruitas Holdings Inc., which advanced 13.6 percent to P1.83; and JG Summit Weekly top price losers were Ayala Corp., which declined 7.8 percent to P740; Ayala Land Inc., which fell 4.9 percent to P41.40; and AC Energy Philippines Inc., which dropped 4.8 percent to P2.15.

European stocks, meanwhile, rallied Friday while Wall Street equities tumbled along with oil prices as markets weighed the potential impact of a spreading viral illness in China.

Chinese authorities expanded a massive quarantine effort in response to coronavirus, while the United States confirmed its second case of the SARS-like ailment.

French officials said there had also been two cases found in France, the first in Europe, while Nepal reported South Asia’s first case.

European bourses, which had dropped on Thursday, finished solidly higher Friday in the first session since the World Health Organization stopped short of declaring a public health emergency. 

“There’s a hope that the coronavirus is contained, particularly in China,” Interactive Investor analyst Richard Hunter told AFP.

“And that’s something of a relief rally—(and) also with the earning season so far so good.

“So the last few days provided an opportunity to investors to buy on the cheaper side,” Hunter added. With AFP