THE LOCAL BOURSE continued declining in August, but the drop was at a much slower pace than the previous month’s, as the market lacked strong catalysts besides the rising number of coronavirus cases.
The benchmark Philippine Stock Exchange index (PSEi) shed 37.37 points or 0.63% to close at 5,884.18 on Friday.
On a monthly basis, the PSEi was down 44.27 points or 0.75%. August was its second straight month of posting a loss. However, the market started to improve compared to how it performed in July when the PSEi dropped 279.27 points or 4.7% month on month.
“The benchmark index fell by 44 points during the month of August — pleasantly surprising performance versus July, considering the historical dryness of trading during the ‘Ghost Month,” online brokerage 2TradeAsia.com said.
August is called a “ghost month” by many investors, which is believed by some as a period of bad luck — hence, they avoid big moves in the market.
But the brokerage said there were still investors that went on with trading last week to secure profits ahead of the long weekend.
“Profit-taking dominated the week, ahead of a shorter yet data-heavy week ahead: inflation data will be reported plus decision to extend or ease current (quarantine restrictions) in Metro Manila and nearby areas,” 2TradeAsia.com said.
Value turnover went up 71% to an average of P9.09 billion last week. Net foreign selling also extended and grew more than double to an average of P972.41 million.
The local bourse is closed on Monday in observance of the National Heroes’ Day.
“The week’s headlines saw reaffirmation from listed firms on capital plans that are restarting/continuing despite headwinds from the coronavirus… To this effect, we further see elevated transaction activity and cash flow strengthening,” the brokerage said.
As with the past months, sentiment also continues to be driven by data on the coronavirus infections. Total cases in the Philippines stood at 213,131 as of Saturday, of which 74,611 are active cases.
Across the world, the virus has infected nearly 25 million people and has killed 842,499, based on records from Johns Hopkins University.
For the coming week, one of the primary drivers will be the release of headline core inflation data on Sept. 4, which is expected to reflect the impact of the stricter quarantine from Aug. 4 to 18.
Global equity markets rose to a new high on Friday as US consumer spending in July suggested a strong economic rebound lies ahead, while the Japanese yen surged on safe-haven buying after Prime Minister Shinzo Abe resigned for health reasons.
The dollar neared lows last seen in May 2018, retreating from Thursday when the Federal Reserve said it will allow inflation to run faster for longer, a stance that will likely lead to a period of prolonged low interest rates. — Denise A. Valdez with Reuters