PHILIPPINE SHARES may trade cautiously this week as investors await the release of October inflation data and companies’ financial reports.
On Friday, the benchmark Philippine Stock Exchange index (PSEi) dropped by 0.44% or 25.23 points to close at 5,680.35, while the all shares index went down by 0.51% or 16.31 points to 3,178.42.
Week on week, it decreased 48.28 points from Oct. 23’s finish of 5,728.63.
Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said the local market fell last week amid rising global oil prices and escalating tensions in the Middle East.
“Worries grow amid the Houthis’ attacks on Saudi Arabia as well as recent incidents of tankers getting struck with mines at the Strait of Hormuz,” he said in a Viber message.
For this week, investors are expected to monitor third-quarter corporate results for leads.
“I expect the Philippine stock market to remain volatile and largely earnings-driven in the first week of November. After October’s sharp fluctuations, investors will likely remain selective,” Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said in a Viber message.
He said banks such as BDO Unibank, Inc., Bank of the Philippine Islands, and Metropolitan Bank & Trust Co. are companies to watch as their results could show the impact of higher interest rates on lending margins, loan demand and credit quality.
Property firms Ayala Land, Inc. and SM Prime Holdings, Inc., as well as consumer and holding companies Jollibee Foods Corp., SM Investments Corp. and Ayala Corp., are also worth monitoring for the effects of inflation and higher borrowing costs on business performance and consumer spending, Mr. Arce added.
“Overall, I expect a cautious market with opportunities for selective rebounds rather than a broad-based rally.”
BDO Securities Corp. President John Tristan D. Reyes said the focus will also be on the October consumer price index report to be released on Nov. 5 (Thursday) and third-quarter gross domestic product data that will be out on Nov. 9 (Monday).
“For the broader market, we still see a downward bias, with the PSEi likely to retest the 5,600 psychological level.”
COL Financial Group, Inc. Research Analyst Denise Joaquin said the October inflation report would affect expectations for the central bank’s December policy decision.
She added that investors would also assess third-quarter earnings to determine how companies performed amid elevated inflation and a weaker peso.
A BusinessWorld poll of 22 analysts and economists yielded a median estimate of 7.6% for October headline inflation.
This would be the fastest print in nearly four years and is sharply faster than 1.7% a year ago. It would also top this year’s peak of 7.2% recorded in April and September. — Alexandria Grace C. Magno