More active trading seen in May

Trading at the Philippine Stock Exchange is expected to pick up this month after the flattish sessions in April as more companies release their first-quarter financial performance.

“We think the market will be more active in May in anticipation of the first quarter 2021 earnings season,” online brokerage firm UTrade said.

Among the companies that are expected to report first-quarter earnings this week are blue chip companies PLDT Inc., SM Investments Corp. and San Miguel Corp.

Investors will also await the release of the April inflation rate and the upcoming monetary board policy meeting.

The March inflation rate already slowed down to 4.5 percent, but analysts said the April inflation rate is a wildcard.

Online brokerage firm 2TradeAsia.com said the declaration of stricter quarantine in Metro Manila and nearby provinces could have pulled the inflation lower but higher power rates and increased input costs could push the rate higher.

The Philippine Stock Exchange Index last week slipped 0.1 percent to 6,370.87.

Four of the six sectoral indices, however, managed to post week-on-week gains led by mining and oil, which rose 10.5 percent, followed by financials which added 0.7 percent.

The property index declined by 1 percent while holding firms dipped 0.1 percent.

Foreign investors were net sellers for the week by P2.6 billion, while the average daily value traded remained was muted at P5.7 billion.

Weekly top price gainers were Philippine National Bank, which jumped 35.7 percent to P31.15, Del Monte Pacific Ltd. which advanced 28.3 percent to P13 and Atlas Consolidated Mining and Development Corp., which climbed 19.2 percent to P8.68.

Weekly top price losers were Leisure & Resorts World Corp., which fell 10.6 percent to P1.60, Chelsea Logistics and Infrastructure Holdings Corp., which dropped 7.2 percent to P2.98, and Megawide Construction Corp., which declined 5.8 percent to P6.61.

US markets, meanwhile, were hit by a bout of profit-taking on Friday, while in Europe data confirming the eurozone is back in recession dampened investor enthusiasm.

Weaker-than-expected Chinese economic data also hit sentiment, with Asia’s main equity indices closing out the week lower.

Wall Street had powered to fresh highs on Thursday following news that US growth accelerated more than six percent in the first quarter and jobless claims continued to fall to new pandemic-era lows.

US indices have also been benefitting from outsized earnings reported this week by tech heavyweights Apple, Facebook and Google.

But investors are starting to worry that the rally has run out of steam, leaving stocks vulnerable to profit-taking.

Friday’s lackluster session may suggest that “a lot of the good news is already priced in,” said Shawn Cruz of TD Ameritrade, adding warnings from companies of higher supply chain costs are “a real big risk to the outlook for the rest of the year.”

The broad-based S&P 500 ended down 0.7 percent, retreating from Thursday’s record but eking out a gain for the week. Both the Dow and Nasdaq finished modestly lower for the week.

European stocks ended the day mostly lower following data showing that the eurozone economy fell into its second recession in less than   a year in the first quarter, as slow vaccinations and pandemic lockdowns stopped a rebound. With AFP