Market likely to advance on third-quarter earnings

Share prices may inch higher this week as companies start reporting their third-quarter results.

Analysts said the positive third-quarter results of listed companies will confirm macro-economic conditions have stabilized and that the economy is on its way to recovery.

“With election spending shifting to full gear plus key industries meaningfully getting some traction, the market is incentivized to front load holdings ahead of 2022, which may explain some premium valuations over the medium term,” online brokerage firm 2TradeAsia.com said.

Investors have become optimistic given the recent decline in COVID-19 infections in the country.

Worries on rising inflation data caused by spike in food prices due to typhoons and higher fuel prices, however, could temper market gains.

Bangko Sentral ng Pilipinas Governor Benjamin Diokno last week has also hinted no policy adjustments for the remainder of the year. The BSP has maintained key interest rate at a record low of 2 percent.

The bellwether Philippine Stock Exchange Index rose 1.1 percent to 7,289.61, while the broader All Shares Index climbed by 0.3 percent to 4,462.70.

Sectoral indices were split. Holding firms gained 3.5 percent while property and industrial climbed 0.7 percent and 0.6 percent, respectively.

The mining and oil index dropped 2  percent while services and financial fell 1.4 percent and 0.5 percent, respectively.

Foreign investors for the week were net buyers by P1.03 billion while the average daily value traded stood at P8.9 billion, down from previous week’s average of P10.8 billion.

Weekly top price gainers were Petron Corp., which rose 9.7 percent to P3.96; Robinsons Land Corp., which climbed 7.8 percent; and First Gen Corp., which added 6.7 percent to P30.30.

Top losers were 8990 Holdings Inc., which declined 12 percent to P9.77;Semirara Mining and Power Corp., which dropped 8.6 percent to P27.50; and Globe Telecom Inc. which decreased 5.6 percent to P3.038.

Meanwhile, the Dow finished at a record Friday, capping a strong week for US stocks, while European and Asian equities mostly rebounded as risks of contagion from troubled Chinese property giant Evergrande eased.

While both the S&P 500 and Nasdaq dropped Friday, all three major Wall Street indices scored weekly gains following mostly solid corporate earnings that have offset worries about inflation.

“While just about every company is talking about supply chain pressures, you’re not seeing a lot of companies talking about how demand is falling,” said Briefing.com analyst Patrick O’Hare.

O’Hare said investors have been reassured by statements that companies have managed to pass on price increases to consumers, preserving profit margins.

But some companies have sold off sharply after surprising investors with bad news.

Snap plunged 26.6 percent as it reported a hit from Apple’s move to change its privacy settings that have made it more difficult to target advertising. Fellow social media companies Twitter and Facebook both lost about five percent. With AFP