PSEi drops as PAL files for bankruptcy in the US

SHARES declined on Monday on profit taking and as Philippine Airlines, Inc. (PAL) filed for bankruptcy protection in the United States.

The Philippine Stock Exchange index (PSEi) went down by 20.03 points or 0.29% to close at 6,877.10 on Monday, while the all shares index shed 5.96 points or 0.14% to 4,255.73.

“Market went on profit taking today after [two] days [of] consecutive [gains], after PAL filed for bankruptcy protection or Chapter 11 in the US,” said in a text message on Monday.

“The PSEi corrected slightly lower today… after near record-high new COVID-19 (coronavirus disease 2019) cases, PAL filed for Chapter 11 over the weekend, and after the softer-than-expected US nonfarm jobs…,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message on Monday.

PAL filed for Chapter 11 bankruptcy in New York with a lender-supported plan that helps the country’s main carrier recover after the pandemic devastated global travel, it said in a statement on Saturday.

Meanwhile, US Labor department data showed nonfarm payrolls increased by 235,000 last month, its smallest rise since January, Reuters reported.

“However, these are offset by the easing of NCR’s (National Capital Region) quarantine classification to GCQ (general community quarantine) proposed granular lockdowns, with guidelines being awaited, to be piloted in NCR,” Mr. Ricafort said.

“Going forward, easing of NCR to GCQ and the granular lockdowns could be de facto measures to further reopen the economy from lockdowns and mitigate the drag on the economy,” he added.

“Others are keeping an eye out for the August inflation data and July unemployment data [that] will be out [on Tuesday],” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a separate Viber message.

Headline inflation likely quickened in August and settled above the central bank’s official target range anew, as a weaker peso pushed food prices up, according to analysts.

A BusinessWorld poll of 16 analysts yielded a median estimate of 4.4% for August inflation, near the lower end of the 4.1% to 4.9% estimate given by the Bangko Sentral ng Pilipinas.

Most sectoral indices started the week in the green except for holding firms, which lost 53.81 points or 0.77% to finish at 6,921.08, and services, which inched down by 5.98 points or 0.33% to 1,762.74.

Meanwhile, mining and oil gained 203.50 points or 2.14% to 9,689.72; financials went up by 6.68 points or 0.46% to 1,457.29; property improved by 0.92 point or 0.03% to end at 3,076.83; and industrials rose by 1.49 points or 0.01% to close at 10,139.45.

Value turnover declined to P5.30 billion with 1.8 billion issues switching hands on Monday, from the P6.45 billion with 1.58 billion shares traded on Friday.

Advancers beat decliners, 95 against 86, as 57 names closed unchanged. Net foreign buying increased to P263.06 million yesterday from P242.74 million on Friday. — K.C.G. Valmonte with Reuters

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