Stock market seen to move lower this week

THE LOCAL STOCK market on Friday was on its second week of selling from overseas funds, weighing down the Philippine Stock Exchange index (PSEi) and most sectoral indices to close lower as investors awaited signals from the US on interest rates, analysts said.

“Market players avoided risk ahead of the Jackson Hole meeting. Defensive posturing characterized [ last] week’s trading,” said Jonathan L. Ravelas, BDO Unibank, Inc. chief market strategist.

The PSEi finished lower by 1.08% to 7,845.49 from its close the earlier Friday. The all-shares index also registered a week-on-week decline of 0.76% to 4,661.61. Mining and oil shares, along with services, were the only sectors spared from the retreat.

Joylin F. Telagen, research head at IB Gimenez Securities, said overseas investors were on a two-week selling binge.

Last week, they sold P22.15 billion worth of shares, resulting in a net selling of P3.54 billion or higher by 14% compared with the Aug. 15-19 week when the comparative figure reached P3.1 billion.

On Friday, after local stock trading closed for the day, Federal Reserve Chair Janet Yellen said in a speech in Jackson Hole, Wyoming that the case for an interest rate rise had strengthened.

Bloomberg reported that remarks from Fed officials lifted optimism on the economy while also bolstering speculation interest rates could rise as soon as next month. It said Ms. Yellen’s speech sparked an early surge in equities amid a bullish economic assessment, which included a lack of clear guidance on when a rate boost may come.

Equities then tumbled after Fed Vice- Chairman Stanley Fischer said Ms. Yellen’s comments were consistent with a possible September increase, only to recover much of their losses in a final-hour rebound, news agency added.

Before the Fed remarks, Mr. Ravelas said he was still biased to see the market move lower, possibly towards 7,500.

“However, there could be some bounce but could be limited towards the 7,900/7,950 levels,” he said.

Ms. Telagen said the past two weeks were the period when foreigners were selling their holdings after Rodrigo R. Duterte took his oath as the Philippines’ 16th president on June 30, 2016.

On that date, the PSEi reached a high of 7,980.75 and closed at 7,796.25. It went on to climb towards its historical highest close of 8,102.30 on July 21.

Last week’s top gainers were PhilWeb Corp., Vitarich Corp., Harbor Star Shipping Services, Inc. and Calata Corp.

The top price losers were Liberty Telecoms Holdings, Inc., Premium Leisure Corp., F & J Prince Holdings Corp. “B,” First Abacus Financial Holdings Corp. and Pepsi-Cola Products Philippines, Inc. —