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Philippines
Thursday, March 28, 2024

Market expected to trade sideways

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Stocks are expected to move sideways with a downward bias this week after Typhoon Ompong hit Luzon and destructed farms that could push food inflation in September higher.

“We’ll need to keep safe, watch out for and assess the typhoon damage. September’s inflation figure could be adversely affected if the damage to rice harvests are significant enough,” said Gabriel Jose  Perez, sales associate at Papa Securities Corp. 

Inflation rate hit a nine-year high of 6.4 percent in August, on the back of surging prices of rice and fish.  

The government’s economic managers proposed the lifting of administrative and non-tariff barriers on the importation of key food items such as rice, fish, sugar, meat, and vegetables to boost supply and reduce prices.

Inflation rate is one of the factors being monitored by the market because of its impact on domestic spending and consumption.  The Philippine Stock Exchange index, the 30-company benchmark, was down 13.4 percent since the start of the year.

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BDO Unibank Inc. chief investment strategist Jonathan Ravelas said the market was oversold and could be due for a technical rebound.

“Despite the sharp drop these past weeks, the market is quite oversold and maybe ripe for a technical rebound.  [It] may emerge to retry the 7,500/7,800 levels,” Ravelas said.

The PSEi declined 2.4 percent last week to close at 7,413.15 on Sept. 14, while the broader all-share index went down 2.2 percent to settle at 4,555.30, amid the continued sell-off in emerging market assets.

Except for mining and oil subindex which rose 1.3 percent, all other subindices ended in the red led by holding firms (-3.5 percent), financials (-2.9 percent), industrial (-2.6 percent), property (1.5 percent) and services (-0.5 percent).

Foreign investors were net sellers by P3.53 billion last week, while average daily turnover reached P6.09 billion.

Melco Resorts and Entertainment (Philippines) Corp. was the top gainer last week, as it climbed 12.1 percent to P6.96 after the company said it would delist its shares and conduct a tender offer at P7.25 apiece.  Globe Telecom Inc. advanced 4.2 percent to P2,192.

Heavy losers included MacroAsia Corp. which declined 10.3 percent to P17.04; East West Banking Corp. which went down 10.2 percent to P12.66; and JG Summit Holdings Corp. which dropped 9.8 percent to P52.

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