Trading at the Philippine Stock Exchange this week is expected to remain volatile on fears of higher interest rates and rising inflation rate.
Stock market veteran Jonathan Ravelas said investors should brace for more pain as US stock indexes and other equity market have not yet hit the bottom for the year.
Investors this week will focus on the release of the August inflation rate that could provide a signal on Bangko Sentral ng Pilipinas’ next possible policy decision in its next meeting.
]The BSP last week said headline inflation rate likely settled within 5.9 percent to 6.7 percent in August amid the spike in food prices.
Inflation averaged 4.7 percent in the first seven months, above the target range of 2 percent to 4 percent for 2022.
The weakening of the peso, which dropped to a new record low of 56.77 per dollar, is also adding to investors’ list of concerns.
The benchmark PSE Index dropped 0.9 percent to 6,692.65 while the broader All Shares Index declined 0.8 percent to 3,548.53.
Except for the industrial index, all major sectoral index posted week-on-week declines. Services fell 1.8 percent; financials lost 1.5 percent; mining and oil dipped 1.4 percent; property declined by 1.2 percent; and holding firms slipped 0.5 percent.
Foreign investors were net sellers for the week by P128.9 million, while the average daily value traded stood at P6.1 billion, slightly higher than the previous week’s average of P5.87 billion.
Weekly top gainers include Megawide Construction Corp., which advanced 21.3 percent to P5.31; Union Bank of the Philippines, which climbed 6.2 percent to P85, and Jollibee Foods Corp., which rose by 3.7 percent to P245.80.
Weekly top price losers were ABS-CBN Corp., which sank 19.6 percent to P9.15; LT Group Inc., which dropped 5.3 percent to P8.76; and ACEN Corp., which declined 4.9 percent to P7.64.
Meanwhile, sfter following European equities higher Friday, Wall Street stocks reversed course, finishing sharply lower after Russia kept shut a key gas pipeline to Germany.
US stocks had initially gained following August jobs data that showed employment growth moderating and unemployment ticking higher in a report seen by investors as lessening pressure on the Federal Reserve to increase interest rates.
But markets did a 180-degree turn midday as worries increased about the winter ahead after Russian gas giant Gazprom moved to keep natural gas deliveries to Germany off-line.
In a statement, Gazprom indicated it had discovered “oil leaks” in a turbine during a planned three-day maintenance operation, a statement that was seen skeptically in light of international condemnation of Russia’s invasion of Ukraine.
The announcement by Gazprom came the same day as the G7 nations said they would work to quickly implement a price cap on Russian oil exports, a move which would starve the Kremlin of critical revenue for its war effort.
Fear of shortages of natural gas has driven futures contracts for electricity in France and Germany to record levels. With AFP