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Stocks to stay above 7,000 points

Share prices are expected to stay above the 7,000-point level on renewed investor confidence on the economy and hopes a vaccine will soon be available to fight the coronavirus.

Philippine Stock Exchange president Ramon Monzon said investors were slowly gaining confidence on the economy with the gradual restrictions of quarantine restrictions.

Monzon said several investment houses were projecting a more optimistic stock market outlook for 2021 although the impact of the pandemic could last until next year.

Analysts said the surprise rate cut from the Bangko Sentral was a strong boost to market confidence and would support the recovery of the domestic economy.

Analysts though said a market correction was in the offing after its recent spike that preceded over seven months of slump because of the increase in COVID-19 cases in the country.

“The tide is quickly turning and while some correction is due, it is not bound to cut as deep,” online brokerage firm 2TradeAsia.com said.

The Philippine Stock Exchange Index jumped past the 7,000-point mark to close at 7,169.70 last week, up 2.8 percent week-on-week amid the vaccine optimism and the unexpected BSP rate cut.

The market traded on the negative during the first four days last week but jumped above 7,000 on Friday after the BSP decided to lower interest rates to a record low of 2 percent.

Except for mining index, which declined 1.3 percent, all sector indices ended in the green territory led by financials (+7.8 percent), holding firms (+2.62 percent), and property (+2.58 percent).

The average daily value turnover declined to P10.4 billion, while foreign investors were net sellers during the week by P600 million from P1 billion worth of foreign buying in the previous week.

Weekly to gainers included Megawide Construction Corp., which surged 21 percent to P10.60; BDO Unibank Inc., which climbed 12.6 percent to P104.70; and LT Group Inc., which advanced 10 percent to P13.74.

Weekly top price losers were SSI Group Inc., which fell 3.7 percent to P7.80 P1.56; Anchor Land Holdings Corp., which dropped 4.8 percent to P7.80; and Nickel Asia Corp., which slipped 1.5 percent to P4.36.

Meanwhile, global stock markets moved gingerly Friday, with Europe posting modest gains while Wall Street dipped as traders weighed coronavirus vaccine hopes against lockdowns and the lack of a new US stimulus deal.

In Europe, both Frankfurt and Paris ended the day with a gain of 0.4 percent, while London added 0.3 percent.

But Wall Street ended a volatile week on a negative note, with all three indices finishing lower.

“There’s the push-pull of short-term versus long-term and that’s what investors are looking at right now,” Chris Gaffney, at TIAA Bank, said. “There are some very serious risks in the short term, especially with the lockdowns.”

Equities have garnered support from a series of upbeat coronavirus vaccine announcements.

US pharma giant Pfizer and its German partner BioNTech said Friday they have applied for emergency use authorization for their coronavirus vaccine, which could come next month.

Moderna has also said trial results have shown its vaccine to be 95 percent effective at preventing Covid-19. With AFP

Topics: Stock Market , Philippine Stock Market , PSE , Philippine Stock Exchange Index , PSEi , global stock market
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