Stocks are expected to move sideways this week, as the possibility of an interest rate hike in the United States before the end of the year remains following the release of new jobs report.
The long-awaited US jobs report did little to sway traders from bets the Federal Reserve will boost rates this year. Data showed the US labor market is settling into a pace that will support higher borrowing costs.
The US economy created 156,000 jobs last month, lower than the estimated 175,000.
“Market movement this week might be dictated by the result of the US jobs addition in September. Uptick may depend on whether the data turned out to be unfavorable for the Federal Reserve in raising interest rates this December,” F. Yap Securities said.
“Nevertheless, traders still see lower chance of an interest rate hike, even as some Fed officials already warned them not to rule out the possibility of a hike next month. On top of that, OPEC members are also set to meet in Istanbul [on October 8 to 13], the outcome of which could possibly take its toll on crude futures prices,” it said.
F. Yap Securities expects trading to trade within a range of 7,580 to 7,720 points this week.
The Philippine Stock Exchange index, the 30-company benchmark, fell 0.7 percent over last week’s five-day market trading to close at 7.578.28 on Friday, while the broader all-share index went down by 0.6 percent to 4,504.51.
Major subindices ended mixed with holding firms, mining and oil and industrial posting week-on-week gains while financials, property and services registered week-on-week declines.
Foreign investors were net sellers of P655 million last week, as total foreign selling reached P18.18 billion while foreign buying amounted to P17.52 billion.
Top gainers last week were PhilWeb Corp. which surged 29.4 percent to P7.69, Semirara Minng and Power Corp. which climbed 5.8 percent to P120.50 and Manila Water Co. Inc. which rose 5.3 percent to P30.85.
Gaming company PhilWeb reported that its majority shareholder RVO Group of Companies of businessman Robert Ongpin has agreed to sell its entire 63.79-percent stake in the company to Gregorio Araneta Inc. owned by businessman Gregorio Araneta for P2 billion.
Heavy losers were Globe Telecom Inc. which dropped 10.7 percent to P1,821 and PLDT Inc. which fell 6 percent to P1,610.
The Office of Solicitor General, representing the Philippine Competition Commission, last week asked the Court of Appeals to render the P70-billion deal between the country’s biggest telecommunication firms as void due to the lack of proper notification.
The Philippine Stock Exchange Index has dropped 2.8 percent since the day before Duterte’s June 30 inauguration, the only decliner among major Asian gauges and trailing a 11 percent advance in the MSCI Emerging Markets Index.
It’s the poorest showing for a new leader since stocks slumped 31 percent in 1998 in the first 14 weeks of the presidency of Joseph Estrada, the film actor turned politician who was impeached for corruption three years into his term.
The country’s stock index is still higher than where it was when Duterte was elected. It rallied 16 percent from the May 9 vote to this year’s high on July 21 before falling 6.5 percent. While foreigners pulled $316 million from Philippine shares since the end of July, they’ve bought a net $743 million in 2016. The gauge closed down 0.6 percent on Friday.
“The market is just pricing in the risk and ignoring the fact that the government has a sound economic plan and a promising fiscal program on the table,” said Julian Tarrobago, a director at Maybank ATR Kim Eng Capital Partners Inc., which manages four of the 10 best performing Philippine funds. With Bloomberg