Share prices are expected to move sideways this week as investors search for new catalysts after the disappointing economic data and the move of the Bangko Sentral ng Pilipinas to raise interest rates by 50 basis points.
“We continue to see near-term risk to share prices from foreign exchange/macro vulnerabilities from the recent BSP policy rate hike of 50 basis points,” said Luis Limlingan, managing director of Regina Capital Development Corp.
“With BSP Governor (Nestor) Espenilla still looking strongly at fourth quarter rate adjustments, participants were inclined to lighten position temporarily,” Limlingan added.
With the stock market still in the middle of the earnings season, analysts said a higher-than-expected income for companies could provide a boost to the market.
But the current sideways movement might also provide investors an opportunity to accumulate undervalued stocks with a significant upside potential.
The Philippine Stock Exchange Index last week slipped 0.2 percent to 7,804.98 points on the disappointing second-quarter gross domestic product figure. The All Shares Index gained 1 percent to 4,714.69.
The financial and holding firms ended on the negative, while the industrial, property, services and mining and oil indices managed to post week-on-week gains.
Foreign investors were net sellers by P66.4 million, while the average daily value stood at P6.8 billion from the previous week’s average of P6.09 billion.
The weekly top price gainer was Energy Development Corp., which jumped 39.2 percent to P6.99 per share on a planned tender offer and its intention to voluntary delist its shares from the stock exchange.
Other top gainers were San Miguel Food and Beverage Inc., which advanced 17.6 percent to P80; and Golden Bria Holdings Inc., which rose 17.6 percent to P329.
Weekly top price losers were Aboitiz Power Corp., which declined 5.5 percent to P36.10; BDO Unibank Inc., fell 5.3 percent to P129.50; and Jollibee Foods Corp., which lost 3.6 percent to P267.
A plunge of the Turkish lira to record lows, meanwhile, sent shivers through global markets Friday as investors worried about contagion, especially for the European banking sector.
“For some time now investors have been looking at the unfolding currency crisis in Turkey as a local difficulty,” noted CMC Markets UK analyst Michael Hewson.
“However, the accelerating speed of the declines appears to be raising concerns about European banks’ exposure to the Turkish banking system.”
The lira was buffeted by a diplomatic row between Ankara and Washington, with Turkish President Tayyip Erdogan’s attempts to talk up the currency having exactly the opposite effect.
“The plunge in the lira which began in May now looks certain to push the Turkish economy into recession and it may well trigger a banking crisis,” said Andrew Kenningham, chief global economist at Capital Economics.
European banking stocks plunged, the euro weakened while demand for safe haven assets like gold and the Swiss franc picked up as analysts realized the lira’s plunge was not just a local Turkish problem. With AFP