Stock prices fell slightly last week as the local stock market tracked the performance of Wall Street after the release of US inflation data, which did not achieve the agreed target.
The benchmark Philippine Stock Exchange index fell 57.23 points to close at 6,548.77 points.
The main index rose on Monday, but fell for four consecutive sessions.
Volume was thin for most of the week, except for Friday when buying activity rose to 14.9 billion pesos. Average turnover for the week was 6.81 billion pesos, with foreign investors taking 60 percent of the trades and were net buyers at 1.12 billion pesos.
Other sub-indices closed in the red except for the services index, which gained 18.06 points to close at 1,695.09 points.
The broader All Shares index lost 32.06 to 3474.41, the financial index fell 15.79 to 1590.84, the industrial index fell 343.74 to 9485.15, the holdings index fell 1.66 to 6364.03, the real estate index fell 16.93 to 2918.01 and the mining and oil index fell 344.58 to 11277.51.
The number of losing shares decreased during the week by 143 compared to 73, and 30 shares remained unchanged.
Notable gainers were MRC Allied Inc. and Forum Pacific Inc. and Leisure and Resorts World Corp. and Manila Bulletin Publishing Corp. and Asiabest Group International Inc. and Premiere Horizon Alliance Corp. and Oriental Petroleum and Minerals Corp. B.
The biggest loser was Keppel Philippines Holdings Inc. A and Manila Broadcasting Co. and AbaCore Capital Holdings Inc. and Bogo-Medellin Milling Co. Inc. and Monde Nissin Corp. and Vulcan Industrial and Mining Corp. and Lodestar Investment Holdings Corp.
Stock prices may drop further this week as the Federal Reserve is expected to raise its rates by another 75 basis points during its September 20-21 meeting.
“The fixed income market is pricing in fast – in the inflation and hyperinflation story stretching to 2023 could prompt the Fed to raise benchmark interest rates above 4 per cent,” said broker 2TradeAsia.
“It is very likely that BSP [Bangko Sentral ng Pilipinas] This will reflect the hawks, albeit gentler, for fear of a hard landing. Materially higher yields in debt securities take some shine away from equities especially at a time when some sectors, by their nature, require some EPS [earnings per share] erosion from the rising cost of debt.”
Meanwhile, Japhet Luis Tantiangco, director of research at Philstocks Financials Inc, said the market could see episodes of bargain hunting as it falls at attractive levels.
“However, the mood is still expected to be bearish with investor prices rising in another potential 75 basis point rate hike by the Federal Reserve to combat high inflation,” Tantiangkou said.
“Investors are also expected to watch BSP who may also act aggressively amid demand side risks to inflation in our country, and weakness in our local currency which also poses upside risks to our overall price level. A 75 rate hike could trigger basis point by the Fed, which is putting more consumption pressure on the peso, to a 50 basis point rate increase by the BSP.”
Local market support is seen at 6,400 points and resistance at 6,600 points.
Given the uncertain macroeconomic backdrop, BDO Securities said investors should consider high-quality names in consumers, banking, real estate, and conglomerates, or sectors that expect to continue to benefit from positive reopening dynamics and deliver healthy earnings growth at reasonable valuations.
“Many of these names are also trading at substantial discounts or below book value, and they represent good value redemptions, in our view,” the broker said.
For the consumer segment, the broker said investors can check out Puregold Price Club Inc. and Robinsons Retail Holdings Inc. and D&L Industries Inc.
Puregold shares closed last week at P31.35 each, Robinsons Retail at P62 and D&L at P7.53.
She also advised placing bets on Ayala Land Inc. and Megaworld Corp. for the real estate sector, while Alliance Global Group Inc. and SM Investments Corp. and GT Capital Holding Inc. They are strong bets between conglomerates.
Ayala Land closed Friday at P28.55, Megaworld at P2.28, AGI at P9.42, SMIC at P871 and GT Capital at P507 per share.