Extended ECQ to dampen trading this week — analysts

Analysts expect another lackluster trading at the stock market in another shortened trading week following the government’s decision to extend the implementation of stricter quarantine rules. Financial markets will be closed on Friday as the country celebrates Araw ng Kagitingan.

The government on Saturday announced a one-week extension of the enhanced community quarantine rules in Metro Manila and nearby provinces in a bid to curb the recent spike in COVID-19 cases in the country.

BDO Unibank Inc. chief investment strategist Jonathan Ravelas said the reinstallation of mobility curbs would further delay the reopening of the economy.

Ravelas said the development could signal the market to test the 6,000-point to 6,300-point levels in the near term period.

“A break below the 6,000 levels will open the test of the 5,700 levels,” he added.

Analysts said investors were worried that the expected strong economic recovery this year would not be achieved because of the prolonged health crisis.

The Philippine Stock Exchange Index last week dropped 1.6 percent to 6,443.09, while the broader All Shares Index fell 1.1 percent to 3,924.29.

Except for the industrial index which inched 0.2 percent higher, all other sectoral indices ended in the red led by property, which declined 2 percent, and mining and oil, which lost 1.8 percent.

Foreign investors were net sellers by P2.15 billion during the three-day trading week, while the average daily value traded dropped to P6.15 billion from the previous week’s average of P9 billion.

Weekly top price gainers were GMA Network Inc., which jumped 16 percent to P8.70, Filinvest Development Corp., which rose 6.4 percent to P8.67 and Century Pacific Food Inc., which climbed 5.2 percent to P18.48.

Weekly top price losers were Nickel Asia Corp., which dropped 6 percent to P5; DDMP REIT Inc., which declined 4 percent to P2.15; and Metropolitan Bank & Trust Co., which fell 3.5 percent to P44.40.

Tokyo’s Nikkei, meanwhile, led a rally in holiday-thinned trade in Asia on Friday following a record-breaking day on Wall Street with investors buoyed by Joe Biden’s huge new infrastructure spending plan and growing optimism over the economic recovery.

With most equity and commodity markets in the region closed for Easter, business was light but the mood remained decidedly upbeat ahead of the release of key US jobs data that is expected to confirm that the world’s top economy is getting back on its feet.

Confidence that global growth will soar as vaccines allow economies to open has for now overtaken worries that the rebound will fan inflation and force central banks to wind back their market-boosting monetary policies.

“Before you worry about inflation, there’s reflation and I think that’s the main theme in the market,” Ed Campbell, at QMA, said.

Biden’s $2.25 trillion rebuilding package—coming soon after the passage of his $1.9-trillion stimulus—has reinforced the view among investors that the US economy will run hot, with analysts saying its corporate tax implications were also being put aside for now. With AFP