After returning to the 7,800-point mark last week, trading at the Philippine Stock Exchange is expected to enter into a consolidation phase for the rest of August, considered a “ghost month” by many Asian traders.
Analysts said volumes could thin during the ghost month when Asian investors avoid making big investments or decisions. The month of August also coincides with the vacation of fund managers in the West.
Papa Securites trader Gio Perez said investors would also be monitoring the release of the July inflation rate figure scheduled on August 7, as well as the Monetary Board’s next policy meeting on August 9
With inflation rate remaining on the upward trend, analysts are expecting the Bangko Sentral ng Pilipinas to increase interest rates by 50 basis points.
COL Financial said in a mid-year market outlook report it did not expect the market to sustain its upward momentum over the short-term period.
“We don’t expect the current strength of the PSEi to be sustained in the short term, allowing it to return to its previous high given the absence of catalysts,” COL Financial said.
“However, there are numerous indicators strengthening our conviction that we have already seen the low at 6,900, including the magnitude and duration of the ongoing correction, attractive valuations, more subdued expectations and the Philippines’ still favorable outlook,” it added.
The Philippine Stock Exchange Index last week closed higher for the fourth consecutive week on increased foreign inflows.
The PSEi rose 1.5 percent week-on-week to close at 7,819.39. while the broader All Shares Index gained 1.1 percent to 4,668.29.
Except for the financial and property which registered week-on-week declines, all other major sub-indices ended in the green led by mining and oil (+5.38 percent), holding firms (+3.94 percent), services (+1.39 percent) and industrial (0.98 percent).
Foreign investors were net buyers during the week by P856 million, while the average daily value traded stood at P6.09 billion, up from last week’s average of P5.8 billion.
Weekly top price gainers were conglomerates Aboitiz Equity Ventures Inc., which rose 11.9 percent to P61.55; Metro Pacific Investments Corp., which advanced 10.8 percent to P5.03; and DMCI Holdings Inc., which climbed 5.9 percent to P12.40.
Weekly top price losers, meanwhile, were Philippine National Bank, which declined 5.2 percent to P45.50; Bloomberry Resorts Corp., dropped4.7 percent to P10.08; and Leisure & Resorts World Corp., which fell 4.7 percent to P4.05.
Global stock markets, meanwhile, pushed higher on Friday as a positive US jobs report apparently outweighed the latest escalation of US-China trade threats.
On Wall Street, the Dow and S&P 500 were in positive territory, while the tech-heavy Nasdaq Composite was just better than flat.
In Europe, markets in London, Frankfurt and Paris all closed with gains. Drops in the value of the pound and euro helped the business prospects of firms, thus supporting equity values.
Trade tensions ratcheted higher as Beijing warned it was prepared to impose new tariffs on $60 billion worth of US goods if Washington ups the ante in the escalating US-China trade war. With AFP
