PSEi declines on concerns over reenacted budget

By Arra B. Francia, Reporter
STOCKS CORRECTED on Wednesday, ending a four-day winning streak as investors assessed how a pause on public works could affect the implementation of new projects next year.
The benchmark Philippine Stock Exchange index (PSEi) fell 0.42% or 31.20 points to 7,382.43 by closing bell yesterday. The broader all-shares index likewise dropped 0.34% or 15.38 points to 4,443.38.
“Today’s downward bias may have been influenced by the government’s re-enacted budget and ban on public works ahead of elections, which both point towards a five-month pause in the implementation of new projects,” Papa Securities Corp. Head of Marketing and Business Development Arbee B. Lu said in an e-mail on Wednesday.
Budget Secretary Benjamin E. Diokno said on Tuesday that the government will likely see a five-month pause in new projects to be implemented due to the late signing of the 2019 General Appropriations Act, which the president is expected to sign in mid-March.
This will coincide with the April-May ban on public works for the midterm elections.
“This may put pressure on the government’s GDP (gross domestic product) target next year,” Ms. Lu said, although adding that investors are still focusing on the release of inflation figures on Wednesday next week.
For Eagle Equities, Inc. Research Head Christopher John Mangun, the PSEi’s pullback was expected.
“Investors will continue to take profits and cut positions to raise cash for the long weekend. We expect the index to end the week more or else close to the levels we began the week at,” Mr. Mangun said in a separate e-mail.
Net foreign buying continued, albeit slowing to P265.94 million from Tuesday’s P312.80 million.
Four sectoral indices moved to negative territory, led by property which slumped 0.98% or 35.36 points to 3,541.67. Financials shed 0.61% or 10.93 points to 1,753.63; services slipped 0.32% or 4.55 points to 1,411.18; while mining and oil went down 0.04% or 3.78 points to 8,509.92.
In contrast, holding firms added 0.01% or 1.25 points to 7,282.89, while industrials was flat with a 0.44-point increase to 10,710.79.
Some 1.15 billion issues switched hands valued at P7.22 billion, slimming from the previous session’s P7.59 billion.
Decliners outpaced advancers, 95 to 81, while 54 names were unchanged.
Overseas, Wall Street advanced. The Dow Jones Industrial Average gained 0.44% or 108.49 points to 24,748.73. The S&P 500 index climbed 0.33% or 8.75 points to 2,682.20, while the Nasdaq Composite index also added 0.01% or 0.85 point to 7,082.70.
Asian markets ended mixed on Wednesday, although investors remained cautious on how US President Donald J. Trump and Chinese President Xi Jinping’s negotiations will go over the weekend.