VIRTUAL STOCK TRADING CHALLENGE: WEEK 6 RESULTS

No letup and new dangers

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DEN SOMERA

The market ended in the red again last week – as if there was no letup to let it break out from 8,000 points on the benchmark index – when it closed at 7,899.98, with a weekly loss of 45.68 points or 0.57 percent.

Foreign investors largely dictated the direction of trading as they continued to be net sellers, at the same time, made up between 54.05 percent and 59.26 percent of the total market transactions during the week.

The biggest dip happened on Friday when the market opened at 8,031, but ended with a loss of 143.09 points or 1.78 percent for the day – a familiar consequence happening lately every time the market goes up to 8,000. Foreign investor selling also far outpaced their buying transactions for the day.

Major danger


More than any other issues stoking investor fears here and abroad was the geopolitical tension in the Middle East that drove the market down this time. The standoff between the US and Russia over Syria has again turned into a tenuous situation that could disrupt market activity in no time.

Toward the end of last week US President Donald Trump threatened to launch missile strikes in Syria, following a deadly chemical attack on civilians blamed on the Syrian government, in a seven-year-old civil war waged against Bashar al-Assad’s Syrian regime.

News about the imminent wave of air strikes in Syria made the rounds in the market by Friday. Surface-to-air missile fires were, then, unleashed in different parts of the Syrian capital “at 4:00 a.m. Saturday, April 14, 2018.” Said strikes were launched by the US and by the combined forces of Britain and France.

The “precision strikes,” initial reports said, “hit targets near Damascus and in Homs province, including a scientific research center, storage facilities and a command post.”

The Syrian foreign ministry denounced the strikes, as Russia also severely condemned the attacks. Russia further claimed it was only helping Syria’s lawful government in the fight against terrorism.

A total of 118 missiles were reported to have been fired. The missile strikes were also initially considered a “one-time shot.”

These missile strikes, on the other hand, had led to an escalation of tensions that prompted Moscow to call an emergency session of the United Nations Security Council. The intention was to discuss what Moscow claimed to be “aggressive actions of the US and its allies,” which, as it further claimed, “clearly violated the UN charter and the norms and principles of international law against a sovereign state.”

What could complicate and further heighten the already serious situation was Trump’s warning to Iran to desist from standing by the Damascus regime. Iran, in turn, is holding the Western allies “responsible for the regional consequences of this adventurist action.”

In the meantime, Russia and Syria said that of the 118 cruise missiles and air-to-land missiles that had been fired, “a significant number” were shot down, and that “none of the Western strikes in Syria had hit areas covered by Russia’s air defenses around its Hmeimim air base and naval facility in Tartus.”

Fortunately, reports also said, none of Russian air defense systems located on Syrian territory has been used to counter the missile strikes.

However, the present standoff between the US and its allies with Russia and Iran will continue to weigh heavily on investor sentiment and the market’s immediate direction.

Week 6 of the virtual game

Together with the geopolitical dangers unfolding overseas, the local market continues to be burdened by anxieties over inflation issues from the Tax Reform For Acceleration And Inclusion (TRAIN) law.

As Republic Act 10963, the Philippine Statistics Authority (PSA) reported that inflation in March hit 4.3 percent, worse than the Department of Finance’s estimate that inflation should not go higher than “3.6% in 2018, with the inflationary impact of increased excise taxes not to be more than 0.7 percent.”

Private sector forecasts show inflation rising further to above 5 percent by July. Likewise, while it is expected to “edge down later in the second semester,” this is received with skepticism.

Under these circumstances, the only female player in the game continued to find ways to beat the market.

Table 1 is her trading record for last week and Table 2 is the investment summary and performance standings of the players for Week 6:

Pixiu has several transactions lined up for Week 7 that could further advance her position to widen her lead over the other players. Watch out for it in the initial report for Week 7 in the next article.

Den Somera is a licensed stockbroker. The article has been prepared for general circulation for the reading public and must not be construed as an offer, or solicitation of an offer to buy or sell any securities or financial instruments whether referred to herein or otherwise. Moreover, the public should be aware that the writer or any investing parties mentioned in the column may have a conflict of interest that could affect the objectivity of their reported or mentioned investment activity. E-mail address of the writer is den.somera@manilatimes.net and/or at densomera@msn.com

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