Players await Biden inaugural
Investors wanted to find their next Amazon or Tesla of the Philippines
Local share prices dropped as the market contemplated on additional fiscal aid under US President-elect Joe Biden’s administration, as well as earnings releases of some big American banks.
It was the second day of decline for the Philippine Stock Exchange index (PSEi) which closed at 7,203.44, or a fall of 35.02 points or 0.48 percent.
Turnover reached 169.05 billion shares valued at P10.38 billion with foreign buying at P1.77 billion and P2.28 billion selling.
“Blue chips are more cyclical, look at the fundflows for signals — but these depend on economic recovery, success of vaccine rollout; they also depend on earnings clarity — when will rebound come?” Regina Capital Development Corp. managing director Luis Limlingan said.
Limlingan noted speculative stocks are flavor of the month “as investors wanted to find their next Amazon or Tesla of the Philippines, which are very small issues with big growth potential.”
“Some passive investors prefer to invest in mutual funds,” he explained.
Petrol pulls back
Oil prices dipped during the second trading week of the year as the market weighed lockdown reimposition in Chinese cities due to the resurgence in infection, and on a new US stimulus package.
Brent crude shed $1.32 or 2.34 percent to close at $55.10 per barrel (/bbl). US West Texas Intermediate crude settled at $52.36/bbl, lower by $1.21 or 2.26 percent.
Gold fell last week, recording its second consecutive weekly decline, as the greenback rallied despite the bullion’s charm as an inflation hedge over new stimulus to be rolled out.
Spot gold slumped by one percent at $1,827.90 per ounce (/oz). Meanwhile, US gold futures closed down by 1.2 percent at $1,829.90.
Weakness rules
Most Asian markets fell Monday as investors took a breather following a recent rally, though Hong Kong and Shanghai enjoyed gains after data showed China’s economy grew more than expected last year.
While broadly welcomed on trading floors, Biden’s $1.9 trillion stimulus proposal was unable to fuel fresh gains with the spending spree largely factored into prices, while analysts warned it could be watered down by the time it reaches his desk for signing.
Some passive investors prefer to invest in mutual funds.
Concerns about a frightening spike in new virus cases was also keeping a lid on buying sentiment as governments are forced to impose fresh lockdowns while battling to roll out vaccines.
However, the general consensus remains upbeat for the long-term outlook.