PHL shares to move sideways on typhoon impact

STOCKS are seen to be in limbo in the last two weeks of the year as investors assess the impact of Typhoon Odette and the spread of the Omicron variant in the country.

The bellwether Philippine Stock Exchange index (PSEi) gained 64.40 points or 0.89% to close at 7,297.66 on Friday, while the broader all shares index went up by 15.48 points or 0.40% to 3,851.59.

Week on week, the benchmark index increased 105.49 points from its 7,192.17 finish on Dec. 10.

“The PSEi sustained its gains for most days over the past two weeks as new local coronavirus disease 2019 (COVID-19) cases at new 1.5-year low, at 200-500 levels per day recently,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort in an e-mail sent over the weekend.

The Philippines logged 291 new COVID-19 cases on Saturday, bringing the total tally of infected patients to 2,837,555, with 50,675 deaths recorded since the pandemic hit the country in March 2020.

Online brokerage 2TradeAsia.com said optimism prevailed in the local market as the Philippine central bank’s decision to keep rates steady sparked buying despite the government’s announcement on Wednesday of the first two detected cases of the new coronavirus disease 2019 variant in the country.

The Bangko Sentral ng Pilipinas (BSP) maintained its key policy rates at record lows as widely expected on Thursday to support the economy amid the threat from the Omicron variant.

The BSP kept the overnight reverse repurchase rate at 2%, as expected by all 15 economists in a BusinessWorld poll. The overnight deposit and lending rates were also retained at all-time lows of 1.5% and 2.5%, respectively.

“The year’s final weeks of trading are likely to put participation in near-limbo, per usual, with the occasional knee-jerk reactions from Typhoon Odette and Omicron variant headlines,” 2TradeAsia.com said in a market note.

Typhoon Odette, or globally known as Rai, hit the country on Dec. 16, and left the Philippine Area of Responsibility on Dec. 18, leaving 181,500 families affected and 31 confirmed deaths as of Sunday morning.

Meanwhile, the Department of Health announced on Thursday that seven out of eight close contacts of the first two reported Omicron variant cases in the country, have tested negative before they were released from isolation.

2TradeAsia.com said trading catalysts for the next weeks are election-driven consumption headwinds, vaccinations reaching critical mass, and inflation versus interest rate sensitivity.

“Range-wise, the Philippines remains in a better position. However, the sentiment could spill over here depending on how severe the Omicron cases will be and if the cost of goods continues to soar,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Mr. Limlingan pegged the PSEi’s support at 7,120 and resistance at 7,360. Meanwhile, 2TradeAsia.com put immediate support at 7,200 and resistance at 7,400. — M.C. Lucenio