By Marissa Mae M. Ramos
Researcher

TRADING at the local bourse is seen to stay quiet as market players await developments that would reduce uncertainties.

The bellwether Philippine Stock Exchange index (PSEi) closed lower on Friday, down 121.12 points or 1.63% to finish at 7,282.

On a week on week basis, the main index slid 225.20 points or three percent amid ongoing risks over the coronavirus disease 2019 (COVID-19) as well as regulatory concerns of listed firms.

“Uncertainty reverberated across regional bourses, due to fears of factory closures in China as well as service interruption that could roll on supply chain,” online brokerage 2TradeAsia.com said in a market note.

“The key condition so far is that participants are heeding for some degree of ‘predictability’ in suppressing COVID-19, given reports the coronavirus is transmittable in its incubation phase, and that SARS was not,” 2TradeAsia.com added.

In an e-mail, Piper Chaucer E. Tan, client engagement officer and research associate at Philstocks Financial, Inc., said heightened regulatory risks, the COVID-19, and corporate earnings continue to influence market activity with both local and foreign investors “waiting for [a] conviction of strong earnings” result before being enticed to come back.

Average value turnover last week decreased 17% to P6 billion, however, net foreign buying increased to P815 million from the P736 million the previous week.

Amid efforts to curb the spread of COVID-19, economic activities in some parts of China have been on pause. Factories were forced to temporarily halt operations as some roads are also blocked.

The Philippines is among the countries seen most vulnerable to global trade disruptions as 30.8% of the country’s core intermediate goods were sourced from Hong Kong and China, Oxford Economics said last week.

Last week also saw investors unloading some shares of ABS-CBN Corp. after the Office of the Solicitor General filed a quo warranto to cancel its congressional franchise for alleged violations against laws on foreign ownership and “highly abusive practices,” among others.

For this week, China Bank Securities Corp. Senior Research Associate Rastine Mackie D. Mercado said in a text message: “We expect the market to retrace/scale back the forced closure on Friday… [the PSEi] may continue to hover around the 7,350-7,550 range. In the event that the forced closure holds, we expect a retest of the support at around 7,130.”

For Philstocks’ Mr. Tan, the bellwether PSEi “may move this week to 7,200 and 7,500 placing 7,500 as major resistance” as the general market sentiment will be on a “wait-and-see mode” for developments.

He said if regulatory risk “escalates to other industries” as seen in property sector’s Ayala Land, Inc. a few weeks ago, a negative market sentiment might continue.

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