US budget, debt issues drag down PSEi

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The Philippine Stock Exchange index (PSEi) started the week with sudden decline to 6,100 points, on the same concerns from last week particularly the United States (US) budget and debt ceiling.

Those concerns will likely last until the middle of this month, unless the US government resolves them. The local benchmark stocks slid by 2.95 percent, or 188.01 points to 6,191.80, while all-shares index also went down by 2.16 percent, or 83.02 points to 3,758.23.

Ricky Liboro, BPI Securities director, told The Manila Times that the market is still influenced by two major factors: the budget and as well as the debt ceiling concerns of the US.

“It is still the same concern regarding the market within the last two weeks . . . with speculations of a deadlock and government shutdown . . . There is also a shift from emerging markets to developed markets,” Liboro said through a phone interview.


He added that the drop of the stock index was not entirely political—rather there is only political positioning and investor worries on buying that drives the market on a sideways to negative movement.

“The market is to remain on 6,300 to 6,400 point with a negative bias until October 17, where US government decision to the debt ceiling will expire,” Liboro said.

Until a resolution is made until the said date, or any positive news in the following days will be made, the market would remain wallowing in the doldrums or in a downtrend that possibly would last the whole month of October, Liboro explained.

“For near term, the market is on sideways or negative side, while long term is still bullish,” he said.

For his part, Summit Securities President Harry Liu agreed with Liboro that the market is still “watching the development in the US debt ceiling,” and that support is lingering between 6,100 and 6,150 points.

“Medium term [at present]is in consolidation while the long term is still intact [going uptrend],” Liu said in a text message.

Liboro mentioned that historically, the stock market rises by 4 percent to 5 percent starting October 1 to yearend, because of the “build up toward the Yuletide season.” According to Michaelangelo Oyson, chief executive officer and managing director of BPI Securities, the local market can increase from 8 percent to 10 percent by the end of the year in the absence of major external shocks.

Despite majority of the sectoral indices ending on the negative side, the services index went up slightly by 0.27 percent, or 5.28 points to 1,993.33.

Indices posting declines were financials with a 3.45-percent drop, or 54.75 points to 1,534.33, industrial with 1.64 percent, or 153.46 points to 9,181.94, and holding firms with 3.61 percent, or 204.87 points to 5,606.48.

Other indices that also went down were mining and oil, which erased 399.14 points, or 3.16 percent to 12,250.69, and property subtracting 119.89 points, or 4.82 percent to 2,369.42.

Manila Electric Co. and Philippine Long Distance Telephone Co. were the gainers among the most actively traded shares.

Meanwhile, Alliance Global Group, SM Investments, Metropolitan Bank and Trust Co., Universal Robina, Ayala Corp., Ayala Land, BDO Unibank and SM Prime Holdings were among the losers.

Losers outnumbered gainers by a mile—109 versus 35—while unchanged issues stood at 37. Total volume traded was 2 billion shares, while value turnover reached P36.4 billion.

On Friday, the PSEi went down by 0.43 percent, or 27.65 points to 6,379.81, but the broader all-shares index went up by 0.25 percent, or 9.65 points to 3,850.13.

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