Sideways trading seen; eyes on inflation and GDP figures

Share prices are expected to trade sideways during this shortened trading week ahead of key data releases, including the October inflation rate and the third-quarter gross domestic product numbers.

Analysts said the index may consolidate between 6,900 points to 7,300 points over the near-term period as investors monitor the release of crucial economic data as well as results of third-quarter earnings of listed companies.

Bangko Sentral ng Pilipinas Governor Benjamin Diokno last week said there was a possibility the inflation rate in October breached the 5-percent level from 4.8 percent a month ago on higher prices of oil, electricity and some food items, and weaker peso.

With inflation rate expected to remain elevated over the near-term period, investors are worried about its impact on the country’s economic recovery.

However, upcoming equity deals in the market will likely boost investor sentiments. These included the follow-on offering of Synergy Gird & Development Phils. Inc. and The Keepers Holdings Inc., and initial public offerings of AllDay Marts Inc. and Medilines Distributors Inc.

The Philippine Stock Exchange Index last week declined 3.2 percent to 7,054.70 after the government has decided to keep Metro Manila under Alert Level 3 until the middle of November. The index is still down 1.2 percent year-to-date.

Four of the sectoral indices ended in red, led by property (-7 percent), mining and oil (-5.9 percent), holding firms (-5.3 percent) and financial (-1.2 percent).

The industrial index climbed 1.5 percent while services increased gained 0.8 percent.

Foreign investors were net sellers for the week by P1.5 billion as investors cashed in on gains, while the average daily value traded declined to P6.9 billion from the previous week’s average of P8.9 billion.

Weekly top price gainers were AC Energy Corp., which rose 11 percent to P12.26, Wilcon Depot Inc., which climbed 9.8 percent to P31.20, and Jollibee Foods Corp., which advanced 4.4 percent to P235 apiece.

Weekly top price losers were JG Summit Holdings Inc., which fell 9.5 percent to P60.20, DMCI Holdings Inc., which dropped 9.4 percent to P7.95, and Metro Pacific Investments Corp., which declined 9.42 percent to P3.75.

Wall Street, meanwhile, ended October’s trading with a flourish on Friday, with all three indices hitting records despite disappointing corporate earnings and more high inflation data, but the enthusiasm was not shared worldwide.

After a lackluster start to the day’s trading, the Dow, Nasdaq and S&P 500 all made new records by the close, though the gains were not particularly large.

Traders overcame US Commerce Department data showing inflation rising 4.4 percent in September compared to the same month in 2020, its biggest jump since January 1991, as well as Apple and Amazon results that were dented by supply chain troubles.

“The market has been all over the place,” said Peter Cardillo of Spartan Capital Securities, noting the government also reported an unexpectedly large decline in income and a less surprising increase in spending last month. With AFP