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Friday, March 29, 2024

Market monitors Fed rate hike

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Stocks are expected to move sideways this week, despite a possible increase in US interest rate by the Federal Reserve before the end of the year.

US Federal Reserve chair Janet Yellen said in a global monetary policy conference over the weekend the case for a rate increase grew stronger after a lot of new jobs were created as the US economy expanded at a moderate pace.

Investors in the Philippines will only be able to react to this news on Tuesday, as the market will be closed today, in observance of National Heroes Day.

F. Yap Securities said the impact of news on whether or not a rate hike would be upheld by the Federal Open Market Committee would likely be subdued.

“We believe a neutral stance or rate hike possibility has already been factored into share prices, with emphasis shifting to trends in investment and consumer spending,” F. Yap Securities said.

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Analysts said with the end of the ghost month, improvement in value turnover was expected in September.

Investors will also remain focused on the pace of fiscal spending, including the specific details of the Duterte administration’s economic growth agenda.  Interest could revert to consumer-spending staples and infrastructure bets, possibly property and construction.  

“Participants will also heed details on spending-driven tax drives, particularly the lowering of corporate and income taxes, as well as other revenue-offsetting measures,” F. Yap Securities said.

The Philippine Stock Exchange index, the 30-company bellwether, closed lower by 1.1 percent last week to 7,845.49, while the broader all-share index declined 0.8 percent to 4,661.61.

Except for mining and oil and services, which went up by 1.4 percent and 0.4 percent respectively, all other sub-indices posted week-on-week declines.

Foreign investors were net sellers of P3.53 billion last week, as total foreign selling reached P22.15 billion while foreign buying amounted to P18.61 billion.

Top gainers last week were PhilWeb Corp. which surged 67.5 percent to P9.48, Calata Corp. which jumped 22.6 percent to P3.36 and Robinsons Land Corp. which climbed 6.6 percent to P32.

Calata said last week it teamed up with Sino-America Gaming Investment Group Ltd. to establish a real estate and investment trust for a P65-billion gaming and leisure complex in Cebu.

Heavy losers last week were Liberty Telecoms Holdings Inc. which dropped 24.8 percent to P2.18, Pepsi Cola Products Philippines Inc. which fell 11.4 percent to P3.10 and Bloomberry Resorts Corp. which declined 9.9 percent to P5.80.

Vega Telecom Inc., now jointly owned by the country’s two leading telecom firms, offered to buy out minority shareholders of Liberty at P2.20 per share while the Philippine Stock Exchange reported that Bloomberry would be removed from the PSEi starting Sept. 12.

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