Share prices fell on renewed concerns over the situation in the Middle East, which took center stage again as the United States-Iran ceasefire ended without a deal.
The benchmark Philippine Stock Exchange index declined 58.84 points to close at 6,238.46 points.
Trading was still tepid during the four-day work week and this reflects poor confidence, according to Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financials Inc.
Average value of trade reached P5.86 billion. Foreign investors, who cornered 40 percent of the trades, were net sellers at P2 billion.
Other sub-indices ended mixed. The broader All Shares index fell 3.94 points to close at 3,435.23 points, the Financials index declined 0.67 to 1,942.01, the Industrial index gained 79.45 to 8,187.94, the Holding Firms index shed 67.73 to 4,474.51, the Property index was down 1.38 to 1,904.73, the Services index retreated 54.06 to 3,363.12 and the Mining and Oil index surged 1,344.27 to 19,347.20.
For the week, gainers led losers 123 to 96 and 25 shares were unchanged.
Top gainers were Harbor Star Shipping Services Inc., Alsons Consolidated Resources Inc., Zeus Holdings Inc., Philippine Realty and Holdings Corp., East Coast Vulcan Mining Corp., NiHAO Mineral Resources International Inc. and Atlas Consolidated Mining and Development Corp.
Top losers, meanwhile, were Swift Foods Inc. LFM Properties Corp., Cirtek Holdings Philippines Corp., Primex Corp., ABS-CBN Corp., Sta. Lucia Land Inc. and Seafront Resources Corp.
This week
Trading may still be choppy this week as the market weighs on lingering uncertainties against the mixed results of the first half corporate reports.
‘With no end in sight, tensions between the US and Iran are expected to remain hanging above market sentiment. Especially as global oil prices continue their climb, in turn, setting up higher inflation expectations at home,’ Tantiangco said.
At home, the Bangko Sentral ng Pilipinas (BSP) is about to have its policy meeting this week. The BSP is seen to be at a critical juncture as they balance elevated inflation against slowing economic growth in their policy decision. The uncertainties in their policy direction may also weigh on the market, he said.
Broker 2TradeAsia said it expects the BSP to hold its policy rate steady at 4.75 percent during its August 27 meeting, a view that aligns with growing consensus.
It said while several global peers are refining their easing timelines, local policymakers still operate with thinner safety margins. Case in point, the broker noted, is that inflation faces upward bias in August from 6.2 percent in July from a 7.2 percent peak in April.
‘Combined with the peso trading near P61.50 to P61.80 to the dollar and ongoing food-supply volatility, the room for early rate cuts looks extremely limited for now.’
It advised investors to rotate capital-intensive cyclicals and weather-exposed retail names into cash-generative, high-dividend stocks; particularly, power utilities, telecom operators, and top-tier real estate investment trusts, whose yields still sit above sovereign bond rates.
‘With Ghost Month typically thinning liquidity and dampening volumes, we are also watching for selective opportunities in speculative names and mining plays that are more excitable while the index attempts to find stabler footing in the 6,100-6,300 zone.’
Stock picks
Broker RCBC Securities Inc. gave a buy rating on ports operator International Container Terminal Services Inc. and upgraded its target price by 10 percent to P1,129 per share.
‘This implies a compelling total potential return of 23.3 percent, including a 2 percent dividend yield,’ the broker said.
It said the valuation upgrade is anchored on raised earnings expectations and strong cash flow visibility.
‘ICT’s long-term growth prospects remain exceptionally strong, underpinned by the rapid commercial integration of new concessions, capacity expansion initiatives and ongoing operational efficiency programs,’ it said.
ICTSI’s shares closed last week at P960.50 apiece.
Meanwhile, the broker also maintained its buy rating on PLDT Inc. and placed a target price on the stock at P1,620 per share.
‘Our valuation is supported by near-term catalysts, including a potential VITRO REIT listing and anticipated second half revenue acceleration driven by seasonal strength,’ it said.
‘Furthermore, while macro inflation continues to pressure consumer wallets, TEL’s robust Enterprise segment provides a resilient cash flow buffer, one that is well- positioned for long-term expansion as domestic data center demand accelerates.’
PLDT’s shares last week closed at P1,198 apiece.