North Korea tension to weigh on market
Share prices are expected to trade sideways this week as investors stay on the sidelines amid the geopolitical tensions in the region caused by North Korea.
Philstocks Financial trader Justino Calaycay said investors in the equities market would keep watching developments overseas, as the US presents a resolution before the United Nations for further sanctions on North Korea.
“With risks still elevated as evidenced by the movement, or the lack of it, in overseas markets Friday, the floor opens for another week of trades sans the degree of excitement that stirs optimism and
translates to higher share prices – in general, that is,” Calaycay said.
“Markets will be watching action in the United Nations as the US presents its resolution for further sanctions on North Korea. China and Russia have voiced opposition to the move but kept some doors open for a possible support for the move, given certain conditions,” he said.
The expected increase in fuel prices this week could also push inflation rate higher in September from 3.1 percent in August.
Calaycay said given these scenarios, the PSEi, the 30-company benchmark index of the Philippine Stock Exchange, would face the challenge of keeping it above the 8,000-point level and breaking past the 8,100 line.
The PSEi gained 0.8 percent last week to close at 8,022.75 on Sept. 8, while the broader all-share index climbed 0.9 percent to 4,763.30. The bellwether was also up 17.3 percent since the start of the year.
Except for the financial subsector which declined 0.9 percent last week, all other sub-indices ended in the green led by mining and oil which rallied 4.2 percent, industrial which rose 2.1 percent, property which gained 1.7 percent and holding firms which advanced 0.7 percent.
Foreign investors were net sellers by P1.09 billion last week. Average daily turnover declined to P6.8 billion from the previous week’s average of P8 billion.
Top gainers last week were Nickel Asia Corp. which jumped 10.5 percent to P7.98, Megaworld Corp. which rose 6.9 percent to P5.57 and Metro Pacific Investments Corp. which climbed 6.5 percent to P6.76.
Heavy losers included SSI Group Inc. which fell 6.5 percent to P4.47, Megawide Construction Corp. which dipped 4 percent to P16.80 and San Miguel Corp. which went down 3 percent to P97.