Philippine Market Recap Sept 10, 2018

Market Recap

Share prices on the Philippine Stock Exchange opened the week on a soft note, as last week’s report on inflation at a nine-year high continued to place a drag market sentiment.

The benchmark PSEi retreated as much as 132.37 points or 1.74% to 7,466.27, but managed to recoup its losses to close relatively flat, shedding only 2.49 points or 0.03% to 7,596.15. The broader All Shares lost 15.71 points or 0.34% to 4,640.71.

The story remains the same – higher-than-expected inflation, weak peso, weak regional markets.

The statistics office last week reported that inflation clocked in at 6.4% in August this year, the fastest since it came in at 6.6% in March 2009.

Regional shares also started the week in the red as US President Donald Trump raised the stakes in the heated trade dispute with China.

US President Donald Trump warned on Friday that he was ready to slap tariffs on virtually all Chinese imports into the United States, threatening duties on another $267-bil of goods in addition to the $200-bil already facing the risk of duties.

The Fed is all but certain to raise rates a third time this year in late September, boosting demand for the dollar. This, in turn, also increases the prospects of the Philippine central bank to raise its rates as well.

Still, markets remained on edge about a possible new round of US tariffs on imports from China.

Investors have been waiting for a fresh salvo to be fired in the Sino-US trade war after a public comment period for proposed US tariffs on a list of $200-bil worth of Chinese imports, which includes some consumer products, ended late last week.

Further tariffs are likely to lead to a weaker Chinese yuan and stronger dollar, and it is likely emerging market currencies will fall in response.

Local investors continued to pickup the slack amid the continued exit of foreign funds.

More than 1.435-bil shares valued at P7.396-bil, changed hands. Market breadth was negative, with decliners beating advancers, 124 to 62, and 55 issues were unchanged.

Gainers: URC (+5.59%), RLC (+2.89%), GTCAP (+2.13%), SCC (+1.72%), MPI (+1.52%)
Laggards: LTG (-2.59%), AP (-2.03%), BPI (-1.74%), AGI (-1.65%), AEV (-1.50%)