Share prices are expected move sideways this week as investors focus on Bangko Sentral ng Pilipinas’ next move following last week’s 25 basis point rate hike implemented by the US Federal Reserve.
“This week, central bank officials will convene to decide on local interest rates, and how the peso’s weakness will be addressed. To stave off an expected capital outflow from the Fed rate hike, BSP officials will need to review all arsenals that may not necessarily lead to an adjustment in rates,” 2TradeAsia.com said.
Philstocks Inc. research head Justino Calaycay said while the Philippine Stock Exchange Index might continue to trade between 7,500 points and 7,700 points, the entering the bear market remained a threat.
“Philstocks think that while we are not yet in the bear’s hug, we have felt its pawing and the bulls are definitely no longer in control. We have been served up one half of a bearish signal—a death cross on that appeared on the charts sometime April. All it takes is for the Index to drop further past the 7,250 line to provide final confirmation,” Calaycay said.
He said the valuation remained a concern, with the Philippine stock market still considered expensive despite its recent drop.
“While forward PE for the local market has dropped to 17.2 and 15.3 this year and the next, Philippine shares still rank as among the more expensive propositions across the globe, and across the narrower region,” he said.
The bellwether PSEi sank 2.7 percent to 7,529.54 while the broader All Shares Index dipped 2.07 percent to 4,593.18.
All sectoral indices declined, led by property (-5.47 percent), financials (-2.26 percent), holdings firms (-1.96 percent) industrial (-1.29 percent), mining and oil (0.63 percent) and services (-0.62 percent).
Foreign investors were net sellers by P4.02 billion during the three-day trading week, while the average daily valued traded stood at P7.8 billion from the previous week’s average of P5.8 billion.
Weekly top price gainers were Melco Resorts and Entertainment (Philippines) Corp., which rose 8.7 percent to P6 per share; Pilipinas Shell Petroleum Corp., which advanced 4.9 percent to P51; and Bloomberry Resorts Corp., which climbed 4.2 percent to P11.44.
Weekly top price losers, meanwhile, were Lopez Holdings Corp., which declined 12.7 percent to P3.65; Rizal Commercial Banking Corp., which dropped 8 percent to P30.45; and SM Prime Holdings Inc., which fell 7.8 percent to P34.75.
Meanwhile, Wall Street stocks retreated Friday as tit-for-tat tariff announcements by the United States and China ignited a trade war that could spread.
Major indices were in the red the entire session but closed above their session lows.
The Dow Jones Industrial Average dropped 0.3 percent to end the week at 25,090.48.
The broad-based S&P 500 slipped 0.1 percent to close at 2,779.42, while the tech-rich Nasdaq Composite Index lost 0.2 percent to 7,746.38, retreating from Thursday’s record. With AFP