Risk-off sentiment, EDC news weigh on stock market

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Growing geopolitical tensions weighed on the bellwether Philippine Stock Exchange index (PSEi) on Monday and analysts said further volatility could be expected.

The PSEi dropped 0.44 percent or 36.54 points to close at 8,244.73, while the wider All Shares lost 0.32 percent or 15.74 points to end the day at 4,862.65.

“PSEi was … [hit by a]second day of risk-off sentiment due to increasing geopolitical tensions,” IB Gimenez Securities Inc Research Head Joylin Telagen said in a text message.

Telagin added that Energy Development Corp.’s (EDC) decision to limit the number of shares being purchased via a tender offer also pulled the market down, with the firm falling 15.13 percent for the day.


“[A] sell-off of EDC shares also added to negative market sentiment after [Friday’s] tender offer disclosure where 15 percent of the total tendered shares will be returned to tendering shareholders…,” Telagen said.

Brokerage firm Regina Capital Development Corporation, meanwhile, said upcoming economic releases and the closing of the third quarter could rattle prices.

“Some volatility may be expected this week for the Philippines with a lot of funds wanting to ‘clean’ their portfolios ahead of the end of 3Q17,” Regina Capital said.

“The key economic releases this week are the [United States’] durable goods report on Wednesday and the personal income and spending report on Friday,” it added.

“There are several speaking engagements by Fed officials this week, including a speech by [US Federal Reserve] Chair [Janet] Yellen on Tuesday.”

The PSEi hit an all-time high of 8,294.14 last September 18 but succumbed to bargain hunting as the week proceeded.

All sectors declined on Monday except for holding firms and mining and oil.

Decliners outnumbered advancers, 156-65, while 36 issues were unchanged. Total trades amounted to 86,760 shares valued at P6.8 billion.

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