Shares seen to rise as COVID-19 cases stay low
STOCKS may continue to improve in the coming days as coronavirus disease 2019 (COVID-19) cases in the Philippines remain low.
The bellwether Philippine Stock Exchange index (PSEi) advanced by 16.56 points or 0.23% to close at 7,147.30 on Tuesday, while the broader all share index fell by 6.58 points or 0.17% to 3,805.51.
Philippine financial markets were closed on Wednesday in commemoration of the Feast of the Immaculate Conception of Mary.
In the coming days, investors will look at the country’s COVID-19 situation for leads, with window dressing ahead of the year’s close also expected to affect trading.
“Should there be no cases or surge, and if there are no local companies with a big exposure to Evergrande, the market may continue to recover as investors want to start positioning ahead of 2022,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
“Potential window dressing activities as the accounting yearend draws closer, the consistently low COVID-19 cases, and the [bicameral] approval of the national budget would also be another positive lead for the local stock markets,” Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said in a Viber message.
The Department of Health reported on Monday that the country is now under minimal risk as COVID-19 cases continue to drop.
The Philippines logged 356 new infections on Tuesday, bringing the total to 2.84 million. Active cases stood at 13,026.
Meanwhile, China Evergrande did not make payments on some US dollar bonds at the end of a month-long grace period, sources familiar with the situation told Reuters on Tuesday, setting the stage for a massive default by the world’s most indebted property developer.
Failure by Evergrande to make $82.5 million in interest payments due last month would trigger cross-default on its roughly $19 billion of international bonds and put the developer at risk of becoming China’s biggest defaulter — a possibility looming over the world’s second-largest economy for months.
Evergrande was once China’s top property developer, with more than 1,300 real estate projects. With $300 billion of liabilities, it is now at the heart of a property crisis in China this year that has crushed almost a dozen smaller firms.
On the other hand, Philippine lawmakers are expected to ratify the proposed P5.024-trillion 2022 national budget on Dec. 13 before they go on a holiday break, Senator Juan Edgardo M. Angara earlier said.
“PSEi will stay above 7,000 as Omicron-related selling looks overdone,” First Metro Investment Corp. Head of Research Cristina S. Ulang said in Viber message.
Meanwhile, RCBC’s Mr. Ricafort put the PSEi’s next resistance at the 7,200-7,270 levels. — M.C. Lucenio with Reuters
