• LAST week: Philippine stocks
declined as most investors stayed on the sidelines as heavy rains
battered the capital district and other areas causing the closure of
schools, businesses and even the financial markets.
The benchmark
Philippine Stock Exchange Index (PSEI) slid 0.4 percent to 5,263.35
points while the All-Shares index declined 0.5 percent to 3,488.95.
“With
literally no sunshine to provide some positive sentiment in the local
market, traders opted to take profits from the market, which is being
perceived to be expensive,” stock brokerage firm AB Capital Securities
Inc. said in its weekly report.
“Moreover,
investors fretted over the economic impact of the monsoon rains which
is seen to have some inflationary impact,” it added.
Only
the property index ended in the green last week, with a gain of 0.8
percent. Losers were led by the mining and oil subindex, which lost 5.8
percent. This was mainly due to Philex Mining Corp., which continued to
decline following the suspension of mining activities after rains caused
a mining accident in its Benguet mine site.
“Inflationary
worries surfaced after the monsoon rains created concerns about supply
bottlenecks,” AB Capital said. “Prior to this, the National Statistics
Office reported that the country’s July inflation rate surged to a
six-month high of 3.2 percent compared with only 2.8 percent in June.”
Investors are also expecting another rate cut by the Bangko Sentral ng Pilipinas during its next policy meeting.
US
stocks managed to post gains despite weaker readings on Chinese exports
and production. On Friday, the Dow Jones Industrial Average rose 0.32
percent to 13,149.35 while the NASDAQ and S&P 500 increased 0.07
percent and 0.22 percent, respectively.
• This week: Analysts said stocks could remain on “consolidation mode” until early September.
“Bias
could be negative and the short term correction could pull prices back
towards the 5,200-point psychological support level, which is also the
50-day exponential moving average of the PSEI,” AB Capital said, citing
technical indicators. It said longer-term indications remain “bullish.”
Near-term resistance levels are seen hovering between 5,280 and 5,400
points.
“With very little news to trade on, investors will continue to eye the remaining quarterly financial results,” AB Capital said.
“Fundamental
and economic backdrop are positive but may not be strong enough to
support a sustained market advance from current levels. Investors still
have plenty to worry about beyond Philippine shores,” it added.
• Stocks to watch:
As mentioned, investors will be on the lookout for firms which are
reporting earnings. A number of companies have yet to report second
quarter figures including large conglomerates like San Miguel Corp., JG
Summit Holdings, Alliance Global Group Inc., DMCI Holdings and SM
Investments.
(Miguel R. Camus)
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