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Local shares slip as OFW cash remittances weaken

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The Philippine Stock Exchange — PHOTO BY SANTIAGO J. ARNAIZ

PHILIPPINE shares closed the week in negative territory as investors mull over the effects of lower cash remittances sent by overseas Filipino workers (OFWs) in August resulting from the coronavirus disease 2019 (COVID-19) pandemic.

The bellwether Philippine Stock Exchange index (PSEi) fell 39.86 points or 0.67% to 5,898.47 while the broader all-shares index dropped 3.71 points or 0.1% to 3,581.91.

Philstocks Financial Inc. Research Associate Claire T. Alviar said the local bourse was affected by the announcement of the Bangko Sentral ng Pilipinas (BSP) on Thursday, which said that remittances fell 4.1% year on year to $2.483 billion as cash sent from the Middle East and Japan declined due to the pandemic.

“One of the sector laggards is the services index where we can see most consumer stocks that are affected by the lower remittance,” Ms. Alviar said in a mobile phone message.

She also noted that the 10.79% jump in the market’s mining and oil index could be attributed to the decision of President Rodrigo R. Duterte to lift the moratorium on petroleum exploration in the West Philippine Sea.

On Thursday, Energy Secretary Alfonso G. Cusi announced that service contractors have been allowed to resume energy-related activities in the area, which were suspended in 2014 due to territorial disagreements.

In a mobile phone message, Timson Securities, Inc. Head of Online Trading and Trader Darren Blaine T. Pangan said the local market ended in negative territory due to lack of significant catalysts.

Mr. Pangan added that in international markets, investors remained cautious on the resurgence of COVID-19 cases globally, which may lead to the reimplementation of stricter lockdown measures.

European countries registered a spike in new COVID-19 cases, as the Czech Republic recorded a one-day increase of 9,544 new cases on Wednesday, while Italy also posted 8,804 new infections on Thursday alone.

According to the latest data from Johns Hopkins COVID-19 resource center, the United States still has the highest number of cases at 7.98 million, followed by India at 7.37 million, and Brazil at 5.17 million.

Back home, the local market’s sectoral indices produced mixed results during Friday’s close. Mining and oil rose 720.57 points or 10.79% to 7,398.21; industrials improved 48.24 points or 0.6% to 8,016.56; and property went up 6.56 points or 0.23% to 2,775.26.

Meanwhile, holding firms retreated 90.94 points or 1.48% to 6,035.42; services shrank 11.33 points or 0.78% to 1,442.05; and financials declined 4.4 points or 0.37% to 1,177.72.

Advancers outpaced decliners 118 against 89, while 46 names ended unchanged.

Value turnover stood at P5.64 billion with 4.89 billion issues switching hands, against 1.52 billion issues worth P5.67 billion on Thursday.

Net foreign selling amounted to P972.17 million, higher compared to P902.75 million during the previous trading day.

“As the market continues to move sideways, support remains at 5,750 while resistance may be pegged at 6,200,” Timson’s Mr. Pangan said. – Revin Mikhael D. Ochave

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