Trading at the Philippine Stock Exchange will remain muted this week as investors await the release of the September inflation rate, which is expected to accelerate on higher oil and food prices.
The Bangko Sentral ng Pilipinas’ Department of Economic Research last week gave a September inflation forecast of 6.8 percent, with a range of 6.3 percent and 7.1 percent.
Analysts expect the overall sentiments to remain bearish on persistent inflation concerns. BDO Unibank Inc. chief investment strategist Jonathan Ravelas said the bearish mood was making it hard for the index to rally despite oversold levels.
“Despite the sharp drop these past weeks, the market is quite oversold and is ripe for a technical rebound to retry the 7,500/7,800 levels. It seems that the bearish sentiment is still evident and the market is having much difficulty in sustaining any rally above 7,350 levels. Near-term risk lies at the 7,000/7,200 levels,” Ravelas said.
Investors, meanwhile, are expected position ahead of the release of the third-quarter earnings, which will start to trickle in over the next couple of weeks.
The Philippine Stock Exchange Index last week declined 1.4 percent to close at 7,276.82, while the broader All Shares Index slipped 0.94 percent to 4,464.92 on continued foreign selling.
Except for the holding firms index which gained 0.7 percent, all other counters were in the red led by industrial which fell 4.3 percent; property which dropped 2.4 percent; financial which decreased 1.7 percent; and services which lost 0.7 percent.
Foreign investors were net sellers by P1.79 billion, while average daily value traded stood at P4.8 billion, down from the previous week’s average of P6.4 billion.
Weekly top price gainers were Bloomberry Resorts Corp., which rose 9.9 percent to P8.77; Robinsons Land Corp., which advanced 8.1 percent to P20.30; and Aboitiz Equity Ventures Inc., which climbed 4.5 percent to P49.
Weekly top price losers were Cemex Holdings Philippines Inc., which lost 13.1 percent to P2.38; Aboitiz Power Corp., which dropped 8.6 percent to P33.45; and PLDT Inc., which fell 6.1 percent to P1,350.
Wall Street, meanwhile, had a muted session, with the broad-based S&P 500 finishing little changed.
But Tesla shares plunged nearly 14 percent after the US Securities and Exchange Commission charged chief executive Elon Musk with securities fraud, alleging he misled investors last month in tweets about taking the company private.
The SEC is also seeking to bar Musk from serving as a director of a publically listed company.
Analyst notes said the SEC’s move would likely increase the costs for Tesla to raise capital and could bolster private litigation against Tesla over Musk’s claims on going private, while the prospect of Musk’s complete removal was also worrisome.
“We believe it is important for the confidence of investors that Mr. Musk remain involved,” said a note from JPMorgan Chase.
“We believe that the perceived ‘magic’ and ‘mystique’ of Elon Musk on the part of a large contingent of investors is a key reason the stock has commanded the lofty valuation multiples it has in recent years,” the note added.
Tesla was not the only tech giant in the hot seat. Facebook dropped 2.6 percent after disclosing that up to 50 million accounts were breached by hackers, dealing a blow to the social network’s effort to convince users to trust it with their data.
Meanwhile, benchmark crude oil, Brent North Sea, extended gains amid predictions that it could again hit $100 per barrel. With AFP
