Shares drop as cautiousness linger in market

COURTESY OF PHILIPPINE STOCK EXCHANGE, INC.

STOCKS went down on Wednesday as investors remained concerned over the country’s coronavirus disease 2019 (COVID-19) situation amid the easing of quarantine restrictions in Metro Manila and nearby provinces.

The benchmark Philippine Stock Exchange index (PSEi) declined by 3.38 points or 0.04% to close at 6,973.35 on Wednesday, while the all shares index went down by 1.08 points or 0.02% to 4,221.80.

“The PSEi ended just a few points lower, mainly a flat performance as gains in blue-chip banks offset minor losses in holding firms and other issues that rallied in the previous session,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail.

“The index fluctuated throughout the day, as investors weighed carefully the decision of the government to ease the quarantine measures currently implemented in the capital region, against the rising COVID-19 cases in other regions of the country,” Darren Blaine T. Pangan, trader at Timson Securities, Inc., said in a Viber message.

Meanwhile, China Bank Securities Corp. Research Associate Zoren Philip A. Musngi said investors were “generally bullish” due to the strong remittances data seen in the month of April and the developments in the country’s vaccination program.

“The day’s rally was led by the financials sector, which is seeing some investor interest after BSP (Bangko Sentral ng Pilipinas) Governor Benjamin E. Diokno recently said that lending is expected to grow by [the third quarter] as confidence recovers due to reopening of economy,” Mr. Musngi said in a separate e-mail.

The central bank reported on Tuesday that cash remittances rose by 12.7% year on year to $2.305 billion in April.

Meanwhile, Mr. Diokno said last week that lending could return to growth next quarter as confidence improves on the back of progress in the government’s vaccination program.

Most sectoral indices closed in the red on Wednesday except for financials, which gained 37.72 points or 2.54% to 1,520.55, and property, which improved by 19.80 points or 0.57% to finish at 3,448.94.

Meanwhile, mining and oil shed 188.61 points or 1.96% to 9,403.77; industrials lost 122.12 points or 1.27% to 9,445.89; services went down by 16.08 points or 1.02% to close at 1,546.74; and holding firms declined by 39.90 points or 0.56% to 6,987.89.

Value turnover increased to P10.71 billion with 5.22 billion issues traded on Wednesday, from the P8.03 billion with 5.13 billion shares switched hands on Tuesday.

Advancers beat decliners, 111 against 96, while 53 names closed unchanged.

Net foreign selling ballooned to P625.17 million on Wednesday from the P58.79 million seen on Tuesday.

Timson Securities’ Mr. Pangan expects the index to trade between 6,760 to 7,090.

“For [Thursday], we expect another attempt to break through the 7,000 resistance level, but ultimately might end up lower as more investors take profit…,” China Bank Securities’ Mr. Musngi said. — Keren Concepcion G. Valmonte