Stocks may end above 6,000 points

Share prices may go above the 6,000 points this week on last-quarter positioning ahead of the 2021 economic recovery story.

Analysts said investors were also awaiting the release of third-quarter earnings that would determine which sectors were on the way to recovery from the slump in the first half of the year.

“Using or back-of-envelope assessment for the third quarter, some sectors are bound to perform better than others, at least sequentially,” online brokerage firm 2TradeAsia.com said.

Among these sectors are residential real estate, power, logistics and mining.

Analysts said investors were monitoring developments in Congress that could affect the passage of the 2021 national budget.

“An overhang, especially from the legislative side, disrupts the flow of fiscal energy directed towards priority projects—much of which is currently in infrastructure and public works. Conflict breeds volatility, which should tie in well with the premise of October being season for speculation ahead of the US elections in November,” 2TradeAsia.com said.

The Philippine Stock Exchange Index rallied 2.8 percent to close a shade under 6,000points, while the broader All Shares Index climbed 1.9 percent to 3,566.27.

Except for mining and oil index which declined 0.3 percent, all sub-indices registered week-on-week gains.

The financial sector led all gainers, adding 2.9 percent followed by property index, which advanced 2.7 percent. Holding firms also increased 2.7 percent while service rose 2.1 percent.

Foreign investors were net sellers for the week by P3.7 billion, while the average daily value traded stood at P5.3 billion.

Dennis Uy-owned stocks were the top three gainers for the week. Share price of DITO CME Holdings Corp. jumped 37.1 percent to P5.76, while Chelsea Logistics and Infrastructure Holdings Corp. surged 37 percent to P5.33. PH Resorts Group Holdings Inc. advanced 31.6 percent to P3.04.

Weekly top price losers were Pilipinas Shell Petroleum Corp., which declined 12.1 percent to P14.80; STI Education Systems Holdings Inc., which dropped 10.1 percent to P0.31; and Megawide Construction Corp., which fell 5.1 percent to P7.05.

Meanwhile, news that US President Donald Trump and his wife Melania had tested positive for the coronavirus rocked global markets Friday, stoking uncertainty in the world’s biggest economy just one month before Americans go to the polls.

Confirmation of the positive test overnight first hit Asian bourses, setting up Europe for a weak start, which was confirmed when Wall Street followed suit and opened about one percent lower.

Investors then trimmed their losses, with the Dow ending the day lower just 0.5 percent, taking the view that, at this stage, there was no reason to panic—although that could change given the huge potential implications of a president falling ill weeks ahead of the November 3 election.

Briefing.com analyst Patrick O’Hare said the initial “knee-jerk sell-off makes sense” given no one knows how the president’s diagnosis will affect the vote or a pending contested Supreme Court nomination. With AFP