Investors still wary of coronavirus

The uncertainty surrounding the novel coronavirus is expected continue to weigh on the local equities market this week on fears the outbreak will have an adverse impact on the overall economy.

Bangko Sentral ng Pilipinas Governor Benjamin Diokno earlier said the novel coronavirus might cut the country’s growth numbers by about a third of a percentage point in the first half of 2020.

Diokno said the outbreak could slow tourist arrivals from China, affecting the  local travel sector, while remittances from Filipino expatriate workers in the second-biggest economy might also take a hit.

Despite current volatile trading conditions, however, First Metro Investments Corp. remains bullish on the stock market

“Despite the expected volatility that global equities will face in 2020, we think that PSEi will trace a generally upward trend, to hit 8,600-8,900 level sometime this year. Expected strong corporate earnings and the PH economy’s return to above-6 percent growth path should provide the impetus,” FMIC said.

“However, uncertainties surrounding water and media issues could dampen PSEi gains, aside from the recent Taal volcano eruption and the spread of the coronavirus across the globe,” it added.

The Philippine Stock Exchange Index last week rallied 4.26 percent to 7,507.20 points, snapping a four-week losing streak, while the broader All Shares Index rose 3 percent to 4,422.64 as investors welcomed the 25-basis point rate cut implemented by the Bangko Sentral ng Pilipinas.

Except for the mining and oil index which declined 3.6 percent, all other sub-indices ended in the green, led by industrial which advanced 5.3 percent, property which climbed 5.2 percent and financials which added 3.8 percent.

Holding firms also increased 3.6 percent while services rose 1.9 percent.

Foreign investors were net buyers for the week by P736 million, while the average daily value traded improved to P7.38 billion from the previous week’s average of P5.48 billion.

Weekly top price gainers were Manila Electric Co Inc., which climbed 12.8 percent to P288.80, Manila Water Co Inc., which improved 9.2 percent to P13.28, and SM Prime Holdings Inc., which climbed advanced 8.8 percent to P42.35.

Weekly top price losers were Agrinurture Inc., which slumped 46 percent to P6.50, Vista Land & Lifescapes Inc., which dropped 6.4 percent to P6.54, and Semirara Mining & Power Corp., which shed 5.4 percent to P20.80.

Global stocks, meanwhile, mostly fell Friday as investors pocketed profits from this week’s rallies, despite data showing a surge in US job creation.

Equities largely bounced back last week week after heavy losses triggered by worries about the economic fallout from China’s deadly coronavirus outbreak.

But major US indices, which ended at all-time highs on Thursday, spent all of Friday’s session in the red. And major bourses in Asia and Europe also dipped.

“Having already rallied hard this week, it was going to be hard to push equities higher into the weekend, especially given the uncertainty surrounding the coronavirus in China,” said Chris Beauchamp, chief market analyst at online trading firm IG. With AFP