OIL SURGES AFTER OPEC+ HOLDS CUTS, STRONG US JOBS

STOCKS are expected to react to developments in the country’s coronavirus disease (COVID-19) situation this week, with more cases of people infected with different virus variants being reported in the past few days.

The benchmark Philippine Stock Exchange index (PSEi) went down by 1.12 points or 0.01% to finish at 6,881.37 on Friday.

Week on week, however, it went up by 86.51 points from its 6,794.86 finish on Feb. 26.

“The index was up 1.3% [last] week, snapping three straight weeks of losses as sentiment improved following the start of the country’s vaccination drive,” AB Capital Securities, Inc. Junior Equity Analyst Lance U. Soledad said in a Viber message on Friday.

The Philippines started its COVID-19 inoculation on Monday after receiving the first batch of CoronaVac vaccines from Chinese pharmaceutical Sinovac Biotech Ltd. on Sunday, Feb. 28. Over 487,000 doses of the AstraZeneca vaccine from the World Health Organization’s COVAX program also arrived in the country on Thursday, March 4.

“It managed well despite pressures from a corrective US market and inflationary threats,” COL Financial Group, Inc. Chief Technical Analyst Juanis G. Barredo said in a separate Viber message on Friday.

“For [this] week, eyes will remain on the US market and see if it can rally or roll down further. A rise in US bond yields have been the thorn on its side and whose concerns have reverberated worldwide,” Mr. Barredo said.

“Philippine bond yields have also picked up, soaring to around 4% from 3% into the onset of 2021. This was likely due to the rise of inflation, which threatens the possible rise in rates. Such headwinds may keep the market in consolidation bounds for the meantime,” he added.

Consumer prices rose faster for a fifth straight month to a 26-month high in February as food prices continued to surge, the Philippine Statistics Authority (PSA) reported on Friday.

Preliminary data from the PSA showed headline inflation at 4.7% last month, picking up from 4.2% in Jan. 2021 and 2.6% in Feb. 2020.

The February inflation result marked the fastest pace since the 5.1% in Dec. 2018.

The latest headline figure is a tad lower than the 4.8% median in a BusinessWorld poll but falls within the 4.3%-5.1% estimate given by the Bangko Sentral ng Pilipinas (BSP) for February.

Year to date, February inflation settled at 4.5%, beyond the BSP’s 2-4% target for the year.

COL Financial’s Mr. Barredo expects the market to close between 6,600 to 7,400 this week, while AB Capital Securities’ Mr. Soledad sees the index closing from 6,750 to 7,000 as “investors digest a slew of negative and positive news.”

“Faster inflation, increasing cases of the UK and South African COVID-19 variant, and the rising positivity rate might [weigh] on sentiment. On a positive note, vaccine doses continue to arrive in the country, which can accelerate the rollout,” Mr. Soledad added. —