Shares close lower on budget worries
By Denise A. Valdez, Senior Reporter
The main index recorded losses on Friday as concerns over a hold-up in the enactment of the 2021 budget spooked investors.
The bellwether Philippine Stock Exchange index (PSEi) dropped 11.05 points or 0.18% to close at 5,931.61 on Friday, while the broader all shares index picked up 0.20 point or less than one percent to end at 3,563.85.
“The local bourse declined…due to worries over a possible delay in the passage of the national budget for 2021 which in turn would serve as a risk against the local economic recovery,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a text message.
A speakership row at the House of Representatives has put sessions tackling the national budget off schedule, which are now set to resume mid-November against the original mid-October timeline.
This threatens the government to operate using its 2020 budget, which has not taken into consideration the coronavirus pandemic, Socioeconomic Planning Secretary Karl Kendrick T. Chua had said.
The national government has a P4.1-trillion spending plan for 2020 and is looking at a P4.5-trillion budget for next year.
Considering the threats to economic recovery of a delayed 2021 budget, investors chose to stay on the sidelines during Friday’s trading.
“Trading was quite tepid with net value turnover registering P5.3 billion, below the year-to-date average of P5.9 billion,” Mr. Tantiangco said.
Sectoral indices were mixed at the close of session. Mining and oil surged 293.36 points or 4.67% to 6,563.79; services gained 10.88 points or 0.75% to 1,455.72; and holding firms climbed 7.29 points or 0.11% to 6,202.68.
On the other hand, property lost 33.98 points or 1.22% to 2,732.88; industrials slid 5.79 points or 0.07% to 7,931.54; and financials dipped 0.55 point or 0.04% to 1,159.70 at the end of session.
Some 9.16 billion issues valued at P5.63 billion switched hands on Friday, against the previous day’s 2.26 billion issues worth P19.57 billion.
Advancers outnumbered decliners, 119 against 76. Some 43 names ended unchanged.
Net foreign selling continued on Friday but was trimmed to P676.52 million from the P1.21 billion in the previous session.
