Stocks close weaker as traders turn to US markets

MANILA, Philippines — The stock market closed the week on a sour note behind recent developments in the US political landscape.

The Philippine Stock Exchange index fell 0.97 percent or 77.26 points to finish at 7,819.22 on Friday.

The broader All Shares index likewise lost 0.85 percent or 40.53 points to settle at 4,728.81.

“Shares slid as traders monitored the latest trade developments and assessed a whistle-blower complaint against President Donald Trump that was released,” said Regina Capital’s Luis Limlingan.

Limlingan said positive statement on China-US trade talk, however, was able to limit losses in the overnight markets.

Local counters were covered in red, with mining and oil being the biggest casualty with a 2.62 percent or 241-point drop. Holding and property counters fell by more than one percent each.

Net foreign selling amounted to P464 million.

Market breadth was negative as decliners pummeled advancers, 133 to 57, while 43 stocks did not change. Value turnover stood at P5.93 billion.

“While we remain a buy on the index, we’ve been flagging the past few days that we would prefer to wait near its recent lows at the 7,620 level. With a lack of catalysts in the local scene in the near-term, movement could likely be dictated by US market movement and foreign flows,” Gabriel Perez of Papa Securities said.

source: philstar.com

Market may climb anew this week

MANILA, Philippines — The stock market may continue to go up this week, sustaining the gains the previous weeks amid the scheduled resumption of US-China trade talks, traders said.

Michael Ricafort, chief economist at Yuchengco-owned Rizal Commercial Banking Corp. (RCBC), sees the index’s next resistance at the 8,000 mark.

“The Philippine Stock Exchange Composite index (PSEi) gained for the third week in four weeks by 58.85 points or 0.7 percent to close at 7,992.32, a new one-month high and also among four-month highs and also among 17-month highs,” Ricafort said.


This, he said, is amid improved global risk appetite recently with the scheduled resumption of the trade talks between the US and China by early October and recent gestures by both countries to improve the said trade talks.

“The next resistance is at 8,000, which is a gateway prior to further upside potential in the near future,” Ricafort said.


Earlier, US President Trump deferred by two weeks the scheduled higher tariffs (which would translate to additional five percent duties) on $250 billion US imports from China. Trump deferred this to Oct. 15 from Oct. 1 to improve the US-China trade talks.

Ricafort said this was a positive signal for the global financial markets.

China also agreed to exempt some US imports from tariffs for about a year starting Sept. 17, which Ricafort said was another positive signal for the markets.

“Trump administration plans to ease sanctions on Iran to help secure a meeting with Iranian leader Hassan Rouhani on the sidelines of the UN General Assembly in New York on Sept. 23. The markets are also anticipating the upcoming Fed rate-setting meeting on Sept. 18 amid possible 0.25 rate cut, which is another factor that could support sentiment in the global financial markets in the coming week,” Ricafort said.

source: philstar.com

Index ends lower on weak GDP growth, US-China trade woes

MANILA, Philippines — The index ended the week in negative zone, finishing 13.42 points lower at 7,742.20.

Likewise, the broader All Shares gauge was down 16.59 points or 0.34 percent to end at 4,791.26.

Majority of the indices were down as well except for the financials and industrial gauges which ended in positive territory.

Total value turnover reached P7.551 billion. Market breadth was negative, 101 to 78 while 64 issues were unchanged.

Traders said the market is still digesting the lower-than-expected first quarter economic growth of 5.6 percent as well as the lack of resolution on the brewing US-China trade war.


Some specific issues, however, bucked the trend such as Holcim Philippines whose shares reached a new high of P15.30 or up 6.10 percent.

This after San Miguel Corp., Holcim Philippines and Lafarge Holcim confirmed the acquisition by San Miguel of Holcim Philippines.

Lafarge Holcim, Europe’s biggest cement maker, sold its 85.7 percent stake in the company.

Lafarge Holcim CEO Jan Jenish said the sale of the company’s stake in Holcim Philippines now completes the cement giant’s exit from Southeast Asia.

“With the divestment of our activities in the Philippines, we are completing our exit from the increasingly hyper competitive arena in South East Asia. While this decision is based on our strategic portfolio review, we have reached very attractive valuations allowing us to achieve a new level of financial strength,” Jenish said.

On the other hand, SMC’s shares dropped 2.81 percent.

source: philstar.com

‘Miners’ back new bitcoin software upgrade, averts split

NEW YORK — Digital currency bitcoin on Friday averted a split into two currencies after its network supported an upgrade to its software that would enhance its ability to process an increasing number of transactions.

Bitcoin’s miners have signaled their support for the so-called Bitcoin Improvement Proposal (BIP) 91, avoiding a split of bitcoin into two blockchains. The miners represent a network of computer operators who secure the blockchain or a public ledger of all bitcoin transactions

BIP 91 is the first step toward a larger effort to upgrade bitcoin through a software called SegWit2x. On Friday, the support for BIP 91 reached nearly 100 percent, exceeding the required threshold of 80 percent, according to analysts and market participants.

Some investors have warmed to bitcoin, wooed by its explosive performance and potential to compete with gold and government-issued money as a means to store value. Demand for bitcoin has grown in eight years to a market capitalization of more than $40 billion.

But fears about the bitcoin split dampened demand for bitcoin in recent weeks. After hitting record high near $3,000, bitcoin dropped as low $1,830 BTC=BTSP on the Bitstamp platform. On Friday, it traded at $2,647.

The software upgrade attempts to address the bitcoin network’s limitations in processing millions of daily transactions. Bitcoin’s network has not kept pace with its growth and is unable to process all the transactions fast enough.

“BIP 91 unleashes the next wave of innovation because it has been a little bit stagnant of late for bitcoin,” said Rob Viglione, co-founder of ZenCash, a digital coin focused on privacy and security.

Before BIP 91’s endorsement, some bitcoin investors feared it could split into two independent currencies because core developers of the network and the miners each wanted different ways to increase bitcoin’s scale.

A compromise between the two groups has been reached through SegWit2x.

“Bitcoin now has a clear run to add features that allow for faster transactions with lower costs,” said Charles Hayter, chief executive officer of digital currency analytics firm Cryptocompare.

The upgrade to bitcoin’s network will not occur until autumn, said Viglione, because several things need to happen before the new software is activated.

Market participants have complained about the delay in transactions. Analysts say a single bitcoin transaction costs on average 83 U.S. cents to execute, which means micropayments are not feasible on the network.

The network is also limited to roughly seven transactions per second. In comparison, Visa on average handles 2,000 transactions per second.

source: interaksyon.com

Window-dressing seen to prop up stock market this week

MANILA - Buying momentum from last week's trades may spill over this week on quarter-end window dressing and improved risk appetite brought about by the US Federal Reserve's move to keep the pace of its economic stimulus at least for now.

With the US central bank's decision giving equities a temporary reprieve and diminishing concerns of a military attack against Syria, markets begin the week with a relatively clean slate as the two biggest concerns that have weighed on sentiments recently were eased off the table, analysts said.

"One thing going for the local market is the approach of the end of third quarter traditionally marked by window-dressing induced increase in share prices, particularly for members of the composite measure," said Jun Calaycay of Accord Capital Equities Corp.

The final week of trades in the first and second quarters delivered gains of 2.2 percent and 5.1 percent, respectively, putting this week's upside target range between 6,560 and 6,750, Calaycay said.

"We see no reason for the index to go down in the near term now that the Fed has postponed its tapering, which has resulted in a risk-on sentiment," said BPI Asset Management in a weekly report.

However, the Philippine Stock Exchange index's may succumb to pockets of profit-taking following the local barometer's 11.96 percent rally since August 28, BPI added.

The Philippine stock market is coming off a strong week of gains, soaring 4.5 percent to close at 6,424.45 after the Fed decided to hold off the tapering of its $85-billion bond-buying program, a huge driver of stock market rallies in the past.

"As the tapering concern moves to the background, Congress and the White House are seen to get entangled in debates over the US debt ceiling. This is no different from the tiff that nearly shut down government in 2011 and, yet again, early this year...A US default, or at least the prospect of it, may once more shatter confidence in equities," Calaycay said.

The US Treasury may hit its borrowing limit by mid-October. The cap must be raised to prevent the world's largest economy from defaulting on its outstanding obligations.

Fears of a government shutdown and conflicting signals from Fed members dragged the Dow Jones industrial average to its biggest daily slide since August 15. The Dow fell 185.46 points, or 1.2 percent to 15,451.09 last Friday.

A Federal Open Market Committee (FOMC) member signaled the central bank could start reducing stimulus next month and another blasted the decision not to taper in September.

"With economic policies in place and expectations for full year economic growth set, we see no immediate factors that will influence the market to move exceedingly higher. Volatility should be expected in the coming days as the eyes of investors will remain on what happens to US in the next weeks or even month," Maria Arlysa E. Narciso of AB Capital Securities Inc.

source: interaksyon.com

Asian Cities to Become Top Finance Centres by 2022-Survey

LONDON (Reuters) - Top UK traders and dealmakers bruised by intense banker bashing believe an Asian city will take over as the world's dominant financial centre within 10 years, according to a survey.

They also relegated London to third place from second as their preferred location behind Singapore and New York, the poll by headhunters Astbury Marsden found.

Nearly two thirds of 450 British investment bankers surveyed said Hong Kong, Shanghai or Singapore would be the top global finance centre in 10 years.

One fifth felt London would be the world leader in 2022 and one sixth said New York would hold no.1 spot.

"A fast growing, low tax and bank friendly environment like Singapore stands as a perfect antidote to the comparatively high tax and anti-banker sentiment of London and New York," said Mark Cameron, operations chief at Astbury Marsden.

The annual ‘Preferred Location Survey' also found Singapore is the city where British bankers would most like to live, claiming 31 percent of the vote, up from 27 percent last year.

New York was second with a fifth of votes while London slipped to third with 19 percent of the votes versus 22 percent last year.

"Financial centres in the West have taken a real battering since the start of the financial crisis," said Cameron.

"Cities like Singapore and Hong Kong have been quick to capitalise on setbacks in London and New York, courting investment banks and reacting to demand from expats," he added.

Investment banks and trading firms in New York and Europe have struggled to maintain profitability in recent years amid economic uncertainty partly linked to the ongoing euro zone debt crisis.

Bankers and traders in the United States and Europe also face the prospect of draconian restrictions on their riskier practices, moves likely to impact future profitability.

Commodities trader Trafigura said in May that Singapore would become its main trading centre as it seeks to tap demand in Asia, dealing a blow to its former home Switzerland.

Asian banks, in contrast to their Western peers, avoided much of the damage inflicted by the latest financial crisis and have benefited in recent years from solid economic growth and a booming commodities market across the Asia-Pacific region.

source: nytimes.com

Meat Imports Decried

MANILA, Philippines — Local livestock producers in the country have called on President Benigno S. Aquino III to thresh out the problems affecting the livestock industry.

“The government’s policy of allowing massive importation of pork and meat, despite adequacy of supply must be stopped because it has actually deprived the government billions of pesos in customs and tariff duties because they pay only five percent tariff instead of 35 percent,” livestock producers said in a recent press conference.

They said that the policy of the Aquino administration is not only hurting the livestock industry, but may also pave the way for its eventual collapse because it effectively allows smuggling and importation of pork and chicken.

“Our message is not to penalize consumers but to point out that backyard raisers are going bankrupt due to unabated smuggling,” said Rosendo So, convenor of the Swine Development Council.

Among the proposals of the council is to give the Department of Agriculture (DA) a hand in regulating the importation of meat by requiring the Bureau of Customs (BOC) to automatically forward importers’ Inward Foreign Manifest (IFM) to allow the DA to inspect the importations against underdeclaration and misdeclarations by unscrupulous traders.

Hog raisers also urged that imported products first pass through the DA quarantine before the Bureau of Customs final evaluation.

Rep. Nicanor M. Briones, Agap Partly-list, Edwin G. Chen, president Pork Producers Federation of the Philippines (Propork), Gregorio A. San Diego Jr., president, United Broiler Raisers Association (UBRA), and Daniel P. Javellana Jr., chairman of National Federation of Hog Farmers, Inc. (NFHFI) aired the same sentiments as So.

The industry stakeholders said a five-day pork holiday has become necessary in the wake of government’s failure to address their appeal.

They also said that they welcome the decision of Department of Agriculture Secretary Proceso Alcala to relieve two officials, Efren Nuestro and Jane Bacayo as heads of the Bureau of Animal Industry (BAI) and National Meat Inspection Service (NMIS), respectively.

“This is a victory on our part, even as much still needs to be done,” said Chen.

In the same press conference, hog raisers lauded Agriculture Secretary Proceso Alcala’s decision to put on hold the implementation of Administrative Orders 5 and 6.

The two issuances provides for rules on the hygienic handling of newly-slaughtered meat and chilled, frozen and thawed meat in the markets.

“We call on the Aquino government to protect the hog and poultry industries by not only going after “unscrupulous importers” engaged in massive “technical smuggling,” but also by scrapping Administrative Orders No. 5 and 6, which deal on the hygienic handling of newly-slaughtered meat and handling of chilled, frozen and thawed meat in the markets,” the stakeholders said, in a statement.

They said that the two issuances ease out the local growers because they were adopted in consultation with importers of meat, but not with local hog raisers.

article source: mb.com.ph

Oil rebounds ahead of US jobs data

Singapore - Oil prices bounced back in Asian trade Friday from the previous day's sharp losses as traders awaited a key labour market report in the United States, the world's biggest economy, analysts said.

New York's main contract, West Texas Intermediate (WTI) crude for delivery in June, was up 13 cents to $102.67 per barrel while Brent North Sea crude for June gained 17 cents to $116.25 in morning trade.

WTI crude shed $2.68 on Thursday, while Brent tumbled $2.12 to a three-month low as investors reacted to data showing tepid growth in the important services sector of the US economy in April.

The Institute for Supply Management's services index fell to 53.5 in April, from 56.0, showing a sluggish expansion in the services sector.

The numbers put traders on the defensive before the release of the US jobs report later Friday, which is unlikely to spur optimism about the economic situation in the world's top oil-consuming nation, analysts said.

Economists expect Friday's report -- which includes data on both the private and public sectors -- to show the economy created a meagre 162,000 jobs last month, while the unemployment rate was stuck at 8.2 percent.

"Slower-than-expected growth in the massive US service sector dragged on markets as traders awaited the April US payrolls data on Friday," Phillip Futures said in a market commentary.

An indication by the Organisation of the Petroleum Exporting Countries (OPEC) that it wanted to scale prices down to sustainable levels was also bearing down on the market.

"We are not happy with prices at this time," said Abdullah El-Badri, OPEC's secretary general, at an energy conference in Paris.

"There is speculation on the market. We have plenty of oil on the market and we are working to bring the prices down," he added ahead of the cartel's next scheduled production meeting in Vienna next month.

OPEC's largest producer Saudi Arabia has previously pledged to ensure sufficient supplies to cover the shortfall caused by Western sanctions on Iranian crude, as well as disruptions caused by the civil war in Libya last year. — AFP

source: gmanetwork.com