Philippine stocks rebounded Tuesday despite the property and gaming stocks sell-off after President Ferdinand Marcos Jr. imposed a ban on all Philippine offshore gaming operators (POGO).
The 30-company Philippine Stock Exchange index rose 41.07 points, or 0.61 percent, to close at 6,753.12, while the broader all-shares index added 38.50 points, or 1.07 percent, to end at 3,638.48
COL Financial Inc. property analyst Richard Laneda said the ban on POGO would not have a significant impact on the listed property developers as their exposure to POGO significantly decreased since the peak in 2019.
“For the listed companies under our coverage, the direct impact of the POGO ban will be limited,” Laneda said.
He said POGO exposure in terms of total gross leasable area (GLA) of listed property firms was very minimal, citing data from listed companies.
“Property companies’ current valuation suggest any downside reaction will be limited. On a positive note, this resolves a long-standing issue for the industry since its 2018 inception,” Laneda said.
The property sector declined 1.62 percent as Ayala Land Inc. dropped 0.94 percent to close at P31.60, while SM Prime Holdings Inc. went down by 2.45 percent to P29.90.
Megaworld Corp. also dropped 1.6 percent to P1.84, while Robinsons Land Corp. ended lower by 2.09 percent to P14.98 each.
Holding firms advanced by 1.66 percent, while services rose 1.52 percent. Value turnover was at P4 billion.
Meanwhile, Asian stocks were mixed Tuesday as investors struggled to extend a surge on Wall Street, where the tech sector bounced back after last week’s losses, while attention turned to the upcoming release of key US inflation data.
Joe Biden’s decision to drop out of the presidential election race and endorse Vice President Kamala Harris had little major impact on sentiment, analysts said, though there is much debate about who she chooses as her running mate.
However, analysts warned the road will likely be bumpy over the next few months.
Saira Malik at Nuveen said Biden’s decision to pull out of the presidential race “adds even more uncertainty around what has already been a tumultuous 2024 geopolitical landscape.
“Mr Biden announced he will endorse… Kamala Harris, but the exact path forward is uncertain.
“If this news gives former President Trump a bump in the polls, that could provide a further boost to areas of the market that have been pricing in increased prospects for a Republican sweep in November.
“One thing does seem certain: More twists and turns in the political roller coaster in the months ahead.”
Traders are also hoping for more policy announcements to kickstart the stuttering Chinese economy after last week’s closely watched Third Plenum of leaders unveiled few measures save a pledge to help local governments financially.
This week has seen a more upbeat start after a sell-off last week that came on the back of a tech retreat fueled by profit-taking and reports the White House was planning a fresh crackdown on firms supplying chip tech to China.
But optimism for another healthy earnings season, particularly among semiconductor makers, saw a bounce on Monday, with market darling Nvidia among the big winners along with Broadcom and Texas Instruments.
This week sees releases by Google parent Alphabet, Tesla and Spotify.
Tech firms have led the rally in markets this year, helping push all three main indexes in New York to multiple record highs, thanks to expectations the Federal Reserve will cut borrowing costs.
After last week was devoted to the US election and the assassination attempt on Donald Trump, the central bank’s monetary policy is back in focus ahead of Friday’s report on personal consumption expenditure, the Fed’s favored gauge of inflation.
The figure has come down steadily in recent months, giving central bank officials room to begin cutting rates, with bets on a September move increasing.
In New York, all three main indexes rose, with the S&P 500 and Nasdaq up more than one percent each.
Asia followed suit Tuesday morning but some markets were unable to maintain their advances through the day.
Tokyo finished flat and there were losses in Hong Kong, Shanghai, Bangkok, Mumbai and Jakarta, while Sydney, Seoul, Singapore, Wellington, Manila and Taipei rose.
London and Paris fell while Frankfurt rose.
In currency markets, the dollar weakened against the yen ahead of a policy meeting at the Bank of Japan next week that some say could see it hike interest rates again.
The greenback has softened of late against the Japanese unit, with OANDA’s Kelvin Wong citing two catalysts.
“Firstly, it has been the increased odds of a more dovish US Federal Reserve… to kickstart in the September (policy) meeting after a slew of soft key US economic data in terms of spending and inflationary trends.
“Secondly, in an earlier Bloomberg interview with… Donald Trump published on Tuesday, 16 July, Trump implied that he favored a weaker US dollar against the Japanese yen and Chinese yuan yuan (due to US exports losing competitiveness).”
Seoul-listed Kakao tanked more than five percent on news that the billionaire founder of the internet conglomerate, Kim Beom-su, had been arrested Tuesday facing accusations of manipulating stock prices during the purchase of K-pop powerhouse SM Entertainment. With AFP
