Shares may continue to drop amid uncertainties

By Denise A. Valdez, Senior Reporter

PHILIPPINE SHARES may continue falling this week due to the lack of a strong catalyst that could push it up and help it stay at the 6,000 level.

The benchmark Philippine Stock Exchange index (PSEi) gave up 34.62 points or 0.58% to close at 5,908.90 on Friday.

Week-on-week, the PSEi ended flat, shedding 59.06 points or 0.99% to reverse the gains it booked in the prior week.

Value turnover grew 23% to an average of P5.85 billion. While foreign investors were net sellers the whole week, net outflows dropped 76% to an average of P751.2 million

“So far, confidence towards the local market remains low due to the lack of an impetus that could boost appetite amid the lingering uncertainties in our economy and in our COVID-19 (coronavirus disease 2019) situation,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a mobile message.

He noted that net value turnover averaged P4.9 billion, down against the year-to-date average of P5.9 billion, signifying investors prefer to stay on the sidelines. 

The Philippines continues to record thousands of new COVID-19 cases every day, which worries investors of the likelihood of a return to regular business operations soon.

“[A]s the market still lacks a strong positive catalyst, we may see more selling pressures (this) week,” Mr. Tantiangco said. “Value turnover could remain thin while net foreign selling may continue.”

Despite this, online brokerage 2TradeAsia.com said the new P165.5-billion stimulus package of the government may help boost recovery for many sectors.

It listed specific provisions to drive this, such as the 60-day grace period for loans, extension of maturities of debt instruments, easing of competition rules on mergers and acquisitions, P24-billion budget for agriculture and P4-billion budget for tourism.

“[P]rice action seeks equilibrium and catalysts are needed to propel investor appetite higher. In the PSEi’s case, looming fundamental movers include the (central bank’s) policy meeting (on Oct. 1) and third quarter earnings reports beginning October,” 2TradeAsia.com said.

The brokerage is putting immediate support for the market at 5,750 and resistance within 6,000-6,170. Philstocks’ Mr. Tantiango sees the PSEi ranging within 5,700 to 6,100.

Global equity markets slid on Friday as investors sought direction after last week’s US Federal Reserve meeting and a jump in coronavirus cases in Europe rattled sentiment, while gold rose and safe-haven buying lifted the Japanese yen.

On Wall Street, the S&P 500 lost 37.55 points or 1.12% to 3,319.46 and the Nasdaq Composite dropped 117.00 points or 1.07% to 10,793.28. The Dow Jones Industrial Average fell 244.56 points or 0.88% to 27,657.42. — with Reuters