Stocks traded sideways amid lack of catalysts

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THE Philippine Stock Exchange index (PSEi) traded sideways following the lack of strong catalysts from foreign markets, analysts said.

The bellwether index inched down on the last trading day of the week by 0.23 points or 0.003% to 8,022.75, only slightly lower than Thursday’s 8,022.98 while the broader all-shares index rose slightly by 0.46 points (0.01%) to finish at 4,763.3.

“(Last) Friday was the market’s weakest in terms of volume and also the most indecisive, as investors exercised caution ahead of Hurricane Irma’s anticipated passage through the South Eastern US,” read the weekend recap of RCBC Securities, Inc.

Majority of the sub-indices likewise maintained its uptick performance, with mining and oil stocks remaining in first place with 159.91 points or 1.17 % to 13,814.62, followed by holding firms with an increase of 9.67 points (0.12%) to 7,890.98.

Property firms finished with an increase of 3.86 points (0.10%) to 3,785.31, while financials slightly climbed by 2.16 points or 0.11% to 1,970.92.

Industrials and services, meanwhile, went the opposite direction, tumbling down 16.32 points (-0.14%) to 11,226.99 and 9.67 points (-0.55%) to 1,736.73, respectively.

“Despite the market’s week-long strong performance, the PSEi was still unable to establish a more bullish pattern, but only reinforced the 8,100 to 7,900 range for the market near-term,” Luis A. Limlingan, Regina Capital Development Corp.’s head of sales said in a text message.

Mr. Limlingan also pointed to the European Central Bank president Mario Draghi’s positive prediction on the Eurozone market to keep an upward growth due to lower inflation target, but also hinted his plan to reduce the bond-buying program by next month.

“We have been observing the market moving sideways for the majority of this quarter. In my opinion, many local investors are still anticipating developments on the tax reform program,” AP Securities, Inc. equity trader Frank Gerard J. Barboza said.

Local investors kept their eyes on both the east and west coast of the US, with Hurricane Irma threatening to wreak havoc across the Florida coastline. Furthermore, unemployment rate in Texas jumped due to damage caused by Hurricane Harvey.

Meanwhile, US President Donald J. Trump and the Senate set aside their differences to come up with a $15.25 billion emergency fund for Hurricane Harvey victims. It was also earlier reported that the US government would keep the debt limit suspended until early December.

Trading value increased by 4.06% to P 7.89 billion from Thursday’s P7.57 billion with 1.55 billion worth of shares changing hands.

However, this is lower on a week-on-week comparison of P11.26 billion.

“[W]e see continued selling as they try to reduce exposure due to geopolitics in the Asian region,” Mr. Barboza said.

“Developments in the US Fed, on the other hand, could help stir some diversifying funds in the direction of emerging markets,” he added.

The trading week also held a close ratio between gainers and losers with a 99 to 92 score while 55 listed companies remained stagnant.

Foreigners sold more once again on Friday, leading to a net selling of P19.99 million, compared to Thursday’s net selling of P896.45 million and last week’s net buying of P426.13 million

The Philippine Congress and the Department of Finance (DOF) are still currently at odds after the Lower House proposed amendments that would lead to lower revenue yield in the Tax Reform for Acceleration and Inclusion – the first package in the government’s comprehensive tax reform program.

Failure to come into agreement will deal a heavy blow on the administration’s infrastructure projects, as the DOF is demanding to raise P137 billion to support government projects.

Aside from gathering funds through taxes, more revenue is also expected to come in through the amendment of the Foreign Investment Negative List, which will lead to more foreign investments via public-private partnerships pouring in and help the government pay for the big-ticket infrastructure projects around the country. – Anna Gabriela A. Mogato