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Sound fundamentals not enough to lift sentiment

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PSE

PHILIPPINE stocks may trade even lower in the week ahead amid a lack of catalysts that could boost investor sentiment.

The Philippine Stock Exchange index (PSEi) dropped 0.97% or 77.26 points to close at 7,819.22 on Friday. It was down 0.66% on a weekly basis, amid a turnover of P31.76 billion and net foreign outflows of P1.96 billion.

“The general investor sentiment continues to sour as political concerns add into the mix of negatives,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in a weekly market note.

“Nothing seems to give investors optimism that the market could go higher,” Mr. Mangun noted.

“Investors are ignoring economic fundamentals and are more concerned with the general sentiment. The main index has gone below its 200 moving average which is a clear sign that we will see more losses.”

Mr. Mangun noted that any recovery to be seen this week should be regarded as a minor correction, unless volume picks up.

BANKING ON IPOS
“Perhaps the coming IPOs (initial public offerings) can end the coming months with some gains which could give investors some reprieve from this constantly disappointing market,” the analyst said.

Coconut products manufacturer Axelum Resources Corp. will conclude the offer period for its P4-billion IPO on Monday, Sept. 30. It is offering up to 800 million common shares priced at P5 each. Its shares will be listed on Oct. 7.

Meanwhile, home improvement services retailer AllHome Corp. will have its offer period from Sept. 30 to Oct. 4. The Villar-led firm hopes to raise up to P14.9 billion to finance its expansion to more provincial areas until 2020.

Analysts earlier said that investors may be preparing to participate in the IPOs, hence, pulling down trading volumes at the stock exchange in recent days.

WATCHING US DEVELOPMENTS
Papa Securities Corp. Gabriel Jose F. Perez said the bourse may also continue to take cues from Wall Street, which has been reeling from moves by Democrats at the US House of Representatives to initiate an impeachment inquiry against US President Donald Trump.

US markets fell on Friday also on news that the White House is considering delisting Chinese firms from Wall Street and limits to US investments in China. The Dow Jones Industrial Average slipped 0.26% to 26,820.25, the S&P 500 index shed 0.53% to 2,961.79, while the Nasdaq Composite index plunged 1.13% to 7,939.63.

“With a lack of catalysts in the local scene in the near-term, movement could likely be dictated by US market movement and foreign flows,” Mr. Perez said in an e-mail.

AAA Equities’ Mr. Mangun placed this week’s initial support level at 7,630-7,750, with resistance of 7,920-8,000. — Arra B. Francia





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