MANILA, 28 July — Prices on the Manila bourse receded even further last week as traders and investors alike continued to be concerned by the yawning budget deficit as well as the further losses seen on Wall Street overnight.
It came as no surprise then that the market barometer retreated 3.26 percent with a 38.14-point loss to 1,129.42 points. Turnovers likewise fell and the value of trading dropped 18.87 percent to 1.47 billion pesos ($28.994 million). Actual trading plunged 71.5 percent as only 1.045 billion shares changed hands.
AB Capital Securities analyst Jose Vistan Jr. said “the market continued to move sideways because the Dow continued to be bearish, showing more weakness ... and nervousness over accounting practices.”
BPI Securities Corp. analyst Roberto Cano said investors were looking to second quarter results for direction.
“The budget deficit concern continues and it’s a known fact that for the month of July, global fund managers are selling stocks to pay for their mutual fund investors’ redemptions,” Westlink Global Equities analyst Rommel Macapagal said.
The budget deficit expanded to 119.7 billion pesos in the first half, against the targeted 78.2 billion pesos. Budget Secretary Emilia Boncodin said the Philippine government will be reviewing the 130 billion-peso deficit target for the full year.
Ron Rodrigo, research analyst at All-Swerte Securities, said investors remained cautious due to lingering concerns about the government’s budget deficit.
“It would be good the government and for investors if the economic managers would make a statement now that the fiscal targets are no longer achievable and need to be changed rather than make an admission later (in the year),” Rodrigo said.
Vistan added that late last week, investors sold down blue chips after the first half budget deficit report. “The Dow was a positive lead but the market needs to see a combination of positive leads locally and from abroad before posting gains,” he said.
PCI Capital analyst Mike Ordinanza said the market has delinked itself from Wall Street’s movements in the last few sessions.
“It didn’t affect us when it was sliding...once it rebounds it also shouldn’t affect us.” He said sentiment in the US markets is likely to remain jittery following the accounting scandals.
“There are not much prospects for banking given the prospect of past-due loans,” he said, adding that “property still hasn’t recovered despite the low interest rate environment.”
Next week, analysts said investors are likely to stay on the sidelines but buying interest may emerge as the broader market moves closer to support levels.
