Stocks to decline further on lack of fresh leads
PHILIPPINE shares are expected to trade with a downward bias on the absence of positive catalysts as investors remain concerned over rising cases of the Delta variant of the coronavirus disease 2019 (COVID-19).
On Monday, the bellwether Philippine Stock Exchange index (PSEi) declined by 106.63 points or 1.59% to close at 6,587.20. Meanwhile, the all shares index shed 53.39 points or 1.29% to finish at 4,084.55.
Financial markets were closed on Tuesday in observance of Eid’l Adha or the Feast of Sacrifice.
“The market remained in the negative territory for the third straight session and tumbled back to the 6,500-level,” AB Capital Securities, Inc. Junior Equity Analyst Lance U. Soledad said in a Viber message on Monday.
“Investors remained wary of the possible wide community transmission spread of the Delta variant given that the country has not yet vaccinated a significant portion of the population, as well as the sustained high positivity rate,” Mr. Soledad added.
“The market sentiment for the month of July turned weak, as investors expressed concerns over the Delta coronavirus strain spreading across the globe,” Timson Securities, Inc. Trader Darren Blaine T. Pangan said in a separate Viber message on Monday.
The Health department last week reported that cases of the Delta variant of COVID-19 in the country stood at 35. Of these, 11 were locally acquired, while five were cases from returning overseas Filipinos.
Two of the local cases were detected in Manila. City Mayor Francisco “Isko Moreno” Domagoso said officials conducted contact tracing for the two Delta cases, wherein one contact tested positive for COVID-19 out of around the three dozen traced.
The Health department on Tuesday said eight of the 35 Delta variant cases are active.
Health Secretary Francisco H. Duque III said at the weekly address of President Rodrigo R. Duterte that compared to neighboring countries, the Philippines is doing well in containing the spread of the Delta variant.
The country has administered 15,096,261 COVID-19 vaccines as of Monday.
Timson Securities’ Mr. Pangan said the market could move sideways as investors look for fresh leads.
“As market participants are currently on the sidelines, strong catalysts to look forward to include corporate earnings results, as well as the ongoing vaccination program of the government,” he said, adding he expects the PSE index to trade between 6,380 to 6,900.
Listed firms are expected to submit their earnings reports for the previous quarter in the coming weeks.
“Our outlook is the same, although we might see some bargain hunting, we still see the index trading with a downward bias given the lack of strong positive catalysts,” AB Capital Securities’ Mr. Soledad said. — K.C.G. Valmonte
