PSEi may rise as vaccines arrive in the country
PHILIPPINE SHARES are expected to climb this week as investors expect the government’s coronavirus disease 2019 (COVID-19) vaccination program to start as planned.
The benchmark Philippine Stock Exchange index (PSEi) inched up by 38.91 points or 0.57% to end at 6,794.86 on Friday, while the broader all shares index rose 20.14 points or 0.49% to 4,120.30.
Week on week, however, the PSEi declined by 46.14 points from its 6,841.48 finish on Feb. 19.
The market’s average turnover fell by 36.83% last week to close at 9.52 billion.
“The index was lower week on week for the third straight week as the country continues to lag behind peers in terms of vaccination,” AB Capital Securities, Inc. Junior Equity Analyst Lance U. Soledad said in a Viber message on Friday.
Diversified Securities, Inc. Equity Trader Aniceto K. Pangan meanwhile said the government’s decision to maintain strict lockdown restrictions contributed to the market’s decline last week.
“Also, MSCI rebalancing wherein most listed companies were downgraded pulled down the market,” Mr. Pangan added in a mobile phone message on Friday.
The Philippines was expected to receive its first batch of CoronaVac vaccines developed by Chinese pharmaceutical Sinovac Biotech Ltd. on Sunday, Feb. 28.
Some 525,600 vaccine doses manufactured by AstraZeneca Plc. from the World Health Organization’s COVAX initiative were also expected to arrive in the country.
Analysts said investors are waiting to see if the government will begin its inoculation program as soon as the vaccines arrive.
“Given that the local economy is among the hardest hit economies by the pandemic and active cases remain high, delays in vaccine rollout hurt the Philippines’ recovery more,” Mr. Soledad said.
“Positive developments in the Philippines efforts to obtain and roll out the COVID-19 vaccines may help tilt the local market to the upside,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message on Sunday.
Fourth-quarter corporate earnings due for release this week may also affect market sentiment.
“With a number of the companies releasing their earnings this coming week, we may see the market recover as 4Q earnings are expected better than 3Q, which may manifest the improvement of the performance going forward with ease in restrictions,” Diversified Securities’ Mr. Pangan said.
Philstocks Financial’s Mr. Tantiangco said the market may close at 6,600 to 6,900 this week. Meanwhile, AB Capital Securities’ Mr. Soledad expects the PSEi to finish at 6,700 to 7,000.
“For [this] week, we believe investors will still await developments on when the country will start its vaccine distribution,” Mr. Soledad said. — K.C.G. Valmonte