Sept trade data, US polls lift PH shares

The stock market continued to make gains on Wednesday after the government released its latest trade figures and as observers await the outcome of a nail-biting US presidential election.

The bellwether Philippine Stock Exchange index (PSEi) rose by 2.03 percent or 128.49 points to close at its intraday high of 6,464.05 while the broader All Shares added 1.56 percent or 59.14 points to finish at 3,848.61.

Philstocks Financial Inc. research associate Claire Alviar said the bourse took its cue from Wall Street’s advance overnight as investors wait to see if divisive Republican incumbent Donald Trump wins another four-year term or his Democratic challenger Joe Biden becomes the next White House occupant.

All three US markets — the Dow Jones, S&P 500 and Nasdaq — jumped by 2.06 percent, 1.78 percent and 1.85 percent, respectively.

Most Asian markets mirrored their American peers. Tokyo climbed by 1.72 percent, Shanghai improved by 0.19 percent, Seoul was up 0.6 percent, Singapore rose by 0.29 percent and Ho Chi Minh gained 0.47 percent.

Hong Kong slipped by 0.25 percent, Jakarta lost 0.94 percent and Bangkok declined by 0.33 percent.

“Investors are closely monitoring it (US elections), since whoever wins, it would have an impact on the global economy,” Alviar explained.

The growth in exports and the slowdown in imports in September also added to improved investor sentiment, she said.

The Philippine Statistics Authority reported on Wednesday that inbound shipments in the month contracted for the 17th straight month to $7.92 billion, 16.5 percent smaller than the $9.48 billion in September 2019.

Outbound shipments, meanwhile, expanded for the first time since March by 2.2 percent to $6.22 billion from $6.07 billion year-on-year.

According to Alviar, this may imply that domestic demand is gradually picking up again.

“The market stays above 6,200, given the lingering optimism and participation of investors, with an average value turnover of around P6 to 7 billion,” she said.

Regina Capital Development Corp. Managing Director Luis Limlingan also attributed Wednesday’s performance to anticipation of US poll results.

“[I]nvestors hoped a clear winner would emerge from the US presidential election and a delayed or contested result would be avoided,” Limlingan said.

Local sectors all ended in the green, with mining and oil leading at 2.71 percent.
Total volume turnover was at 2.34 billion shares, valued at P7.25 billion.

Winners outpaced losers, 135 to 73, while 46 securities were unchanged.

Manila Water: No 2021 rate increases for now

Manila Water Co. Inc. announced on Wednesday it would postpone implementing its water rate hikes next year to help relieve the impact of the coronavirus disease 2019 (Covid-19) crisis on its consumers.

In a statement, the Ayala-led East Zone concessionaire said it would defer raising the rate to P2 per cubic meter (cu.m.) in “the spirit of bayanihan and to help alleviate the difficulties our customers are experiencing due to the Covid-19 pandemic, compounded by [the] effects of natural calamities.”

“The adjustment due to [the] consumer price index (CPI), or inflation, is likewise deferred for next year,” it added.

Manila Water was proposing a CPI adjustment of 2.7 percent in 2021, equivalent to about 85 centavos per cu.m. This adjustment refers to the annual revision in consumer price growth that happens every January, taking into account the increase in aggregate prices as measured by the CPI, among others.

Asked if the rates would be adjusted at a later date, Jeric Sevilla Jr., Manila Water head of corporate communications, said this “depends on future discussions” with the MWSS Regulatory Office “on how these adjustments will be implemented in the coming years.”

Patrick Lester Ty, chief regulator of the Metropolitan Waterworks and Sewerage System (MWSS), said on Tuesday water firms could defer any rate adjustment, subject to regulatory approval.

“With this decision, we continue to put our customers first as we heed the government’s call to help mitigate the impact of the disruption of economic activity [caused by Covid-19] on most Filipinos,” Manila Water said.

“We believe that, by working together as one nation, we will continue to rise above all challenges we are currently confronting and may still be facing in the future,” it added.

The P2 increase was part of the tariff hike of P6.22 to P6.50/cu.m. This was to be applied in tranches under the rate rebasing period covering 2018 to 2022.

Rate rebasing determines the charges of concessionaires for their water and sewerage services, based on their performance, expenses, earnings, unrecovered investments and service-improvement plans.

Manila Water’s announcement comes a day after West Zone concessionaire Maynilad Water Services Inc. decided to waive its own rate hike by P1.95/ cu.m. in 2021, as well as a CPI adjustment of 2.70 percent of the basic charge, which would have been an additional P1.03/cu.m.

“With this deferral, Maynilad hopes to alleviate the day-to-day struggles of its customers as they and the whole country strive to recover from adversity and rise stronger than before, ready to start anew,” it said.

PH trade deficit narrows in Sept

The country’s trade gap shrank in September from its month- and year-earlier figures as imports outpaced exports, the Philippine Statistics Authority (PSA) reported on Wednesday.

Preliminary data from the statistics agency showed that inbound shipments in the month contracted for the 17th straight month to $7.92 billion, 16.5 percent smaller than the $9.48 billion in September 2019. Outbound shipments expanded for the first time since March by 2.2 percent to $6.22 billion from $6.07 billion year-on-year.

This resulted in the trade balance hitting a shortfall of $1.70 billion in September, smaller than the $1.83 billion in August and $3.4 billion a year earlier.

The decline in the value of imports was blamed on the year-on-year drop in several major import commodities, led by transport equipment (-53.0 percent); mineral fuels, lubricants and related materials (-51.4 percent); and industrial machinery and equipment (-23.3 percent).

The increase in the value of exports was attributed to the year-on-year jump in shipments of metal components, chemicals, cathodes and sections of cathodes of refined copper (133.9 percent); other mineral products (73.3 percent); electronic equipment and parts (32.9 percent); other manufactured goods (5.4 percent); and electronic products (0.8 percent).

Year-to-date, the country’s trade deficit slimmed to $16.1 billion from $30.5 billion in the same period last year, but expanded from the adjusted $14.4 billion in the first eight months.

In a comment, ING Bank Manila senior economist Nicholas Antonio Mapa described the September shortfall as “positive” for the peso, but not for the country’s gross domestic product.

“The Philippine trade deficit continues to tighten, given stark import compression [and] driven by a broad-based decline in economic activity,” Mapa said, adding that the contraction “helped the current account swing back into surplus, which remains a positive for [the peso] in the near term.”

“However, the sustained downturn in [the] imports of raw materials and capital goods points to a continued deterioration in productive capacity and potential output, which does not bode well for prospects for the economic recovery,” the economist said.

“We expect [the peso] to remain supported to close out the year and the change in net exports to be the lone bright spot for the 3Q (third quarter) GDP release later in the week,” he added.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort remarked that the narrower deficit “partly supported the stronger peso exchange rate [versus] the US dollar, as the slowdown in net imports resulted in less demand for the US dollar to pay for imports.”

The “[r]educed trade deficit fundamentally translated to $1.7 billion less demand for US dollars to pay for imports, thereby partly supported the peso’s appreciating trend [versus] the US dollar in recent months, especially since the pandemic reduced the country’s net imports in view of reduced economic activities,” he said..

The peso currently stands at P48.30 against the dollar, compared with P50.635 at the end of last year, according to Ricafort.

Uber, Lyft drivers contractors, court rules

OAKLAND: App-based companies like Uber, Lyft and Doordash have dodged a potentially devastating blow to their industry by carving out an exemption from a California law that required them to classify their drivers as employees instead of contractors.

California voters passed Proposition 22 and delivered a stinging rebuke to state lawmakers and labor leaders who were fighting for better working conditions for a growing number of people who drive for ride-hailing and food delivery services.

California has one of the strictest laws in the country for determining when a company must treat its workers as employees with benefits such as minimum wage, overtime and sick days.

Uber, Lyft, Doordash, Instacart and others sought to get out of those requirements, and after failing in court, succeeded in convincing voters to give them an exemption from most of the year-old law’s provisions.

A record $200 million spending spree by the companies and their supporters helped them win the vote. The investment yielded a huge return for Uber and Lyft, whose combined market value climbed by $10 billion on Wednesday.

Supporters applauded the outcome, saying drivers would be able to maintain their independence while accessing new benefits such as a guaranteed minimum wage and health care subsidies.

Don Pruitt, an accountant in Stockton, was relieved by Proposition 22’s passage because it will allow him to continue to drive for both Lyft and Uber, as well as handle deliveries for Postmates and Instacart, as he has been during the past three years whenever he isn’t busy filing taxes for his clients.

“If Prop. 22 had lost, I wouldn’t have been able to keep doing that to make extra money. I couldn’t work for all of them if I had to be an employee,” Pruitt said.

James Patterson, a Sacramento retiree who drove four years for Lyft but now does deliveries for DoorDash and Postmates, prefers the freedom of being able to make his own schedule.

“You can just work when you want and stop whenever you want,” he said. “And as someone who is retired, it’s nice to get a little supplemental income whenever you need it.”

Others viewed the development as a major setback for gig workers.

“It should be a good wake-up call for us all, across the country, if these companies think they can buy their way out of having to comply with basic labor laws,” said Shannon Liss-Riordan, a labor attorney who has been fighting for employment protections for app-based workers.

Duties on Aussie barley legit – China

China’s anti-dumping duties on Australian barley are legitimate, and they have effectively safeguarded the interests of the domestic barley industry, Chinese experts and barley growers said on Tuesday.

China has reportedly rejected Australia’s appeal to remove the 80-percent barley tariffs imposed in May, according to media reports on Monday.

Xu Ru’gen, executive director of the beer and barley association in East China’s Jiangsu Province, welcomed the news, saying that the tariffs have had a notable effect in safeguarding the interests of Chinese barley growers.

“This is a strong message in safeguarding domestic barley industry, which has contracted under the pressure of massive Australian barley imports,” Xu told the Global Times on Tuesday. Jiangsu is a major barley-growing region in China.

Farmers in China lost interest in growing barley as prices fell due to a large influx of Australian barley. The barley-growing area in Jiangsu declined to 1 million mu (66,666.7 hectares) from more than 3 million mu in the past few years.

“An influx of Australian barley took away the pricing power of domestic barley growers,” Xu said, noting that the tariffs have effectively altered the situation. Now, farmers have resumed growing the crop and seed supply is scarce.

Australian’s barley exports to China were worth about $1.05 billion in 2018, according to a Reuters report.

Song Wei, associate research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Tuesday that Australia typically exports nearly half of its barley crop to China. Song said China’s probe is objective and fair, and
Australia is free to appeal the case to the dispute settlement body at the WTO.

Australia threatened in May to bring the matter to the WTO but has yet to launch a formal case.

Worries have risen in Australia over expanding trade skirmishes with China, after a number of Australian exports including beef, barley, wine, cotton and coal ran into problems in China.

Song said Australia should not undermine China-Australia ties by provoking China and acting like a “deputy sheriff” to the US.

Song noted that China has rolled out its unreliable entity list and updated its export control law to give more teeth to its efforts to defend its economic interests, but the process is accompanied by efforts to ensure that all trading partners of China have proper channels and mechanisms to protect their interests.

Yu Lei, a chief research fellow at the Research Center for Pacific Island Countries at Liaocheng University, said that China’s trade disputes with Australia should not be seen as a trade war.

“Various reasons — enhanced environmental commitment, the market’s self-adjustment and rebalancing, the global economic and trade situation, as well as the COVID-19 pandemic – are behind Australia’s declining exports to China,” Yu told the Global Times on Tuesday.

Asian markets rally on stimulus hopes

TOKYO: Asian markets rallied Thursday as Joe Biden inched towards becoming the next US president, with investors now hoping lawmakers will soon pass a much-needed new stimulus package.

Traders brushed off Donald Trump’s claims of fraud and calls to stop vote-counting by calling in lawyers, instead taking heart from the failure of a Democratic sweep of Congress, which would have likely led to tax hikes and regulation.

While crucial battleground states remain close, the former vice president said he was confident that “when the count is finished, we believe we will be the winners.”

All three main indexes on Wall Street surged, with the Nasdaq soaring almost four percent as tech titans including Apple and Facebook breathed a sigh of relief.

“Up until approximately remaining week, the consensus perception turned into a complete blue sweep — now that’s converting you’re seeing a repricing taking area within the market,” Anna Han, at Wells Fargo Securities, advised Bloomberg TV.

However, Trump in advance claimed victory unilaterally and made clean he might now not receive the said effects, issuing exceptional proceedings —unsupported via any proof — of fraud.

“The harm has already been accomplished to the integrity of our machine, and to the Presidential Election itself,” he tweeted, alleging with out proof or deltamarket that “secretly dumped ballots” have been added in Michigan.

Still, analysts stated that at the same time as Trump’s court bids should motive some uncertainty, many investors were assured the uncertainty could not likely drag on.

“The contest isn’t always over, and President Trump will now not move down with out a fight, however financial markets are assured to rate in a Biden presidency together with a Republican managed Senate,” said OANDA’s Edward Moya.

Hong Kong rose percentage and Tokyo jumped one percentage, while Sydney, Singapore, Seoul and Jakarta have been all up multiple percent. Shanghai won 0.6 percent and Manila jumped 2.Eight percentage.

Hopes for a new monetary rescue bundle out of Washington had been providing support to equities, even though any spending invoice will not be as massive as previously concept underneath a Democrat-run Congress.

With politicians going back to work on Monday, Republican Senate chief Mitch McConnell lifted hopes for a quick resolution, pronouncing: “We need every other rescue package.

“Hopefully the partisan passions that prevented us from doing some other rescue package deal will subside with the election. And I assume we want to do it and I assume we want to do it before the give up of the year.”

And in a signal that the deadlock that avoided agreement over the last few months was subsiding, he indicated he could be willing to examine cash for local and nation governments, which become a key sticking point.

Dealers were also keeping tabs on coronavirus trends with England going into lockdown for a 2nd time, joining France and other key European economies, though observers said that they had largely been priced into markets now.

Axi strategist Stephen Innes said: “Accelerating Covid cases and new shutdowns are obviously no longer excellent, however I assume the market will fast appearance past those new measures.

“Rolling shutdowns are part of the pandemic new everyday, and most buyers apprehend this will be a global characteristic till we get a vaccine or herd immunity.”

He brought that vaccine hopes have been additionally growing, with Britain and Germany probably on route for a jab with the aid of the stop of the 12 months.

The markets are

“The markets are watching for extra information out of Algeria. Trading has been skinny so what we’re seeing is mainly early-morning income taking in Asia,” OANDA senior market analyst Jeffrey Halley instructed Agence France-Presse.

– Key figures around 0300 GMT (eleven:00 AM MANILA TIME) –

Tokyo – Nikkei 225: DOWN zero.Three percent at 16,490.41

Hong Kong – Hang Seng: UP zero.Eight percent at 23,511.86

Shanghai – Composite: UP 0.04 percentage at 2,981.620

Euro/dollar: DOWN at $1.1244 from $1.1254 late Monday

Dollar/yen: UP at 100.70 yen from one hundred.30 yen

Pound/dollar: UP at $1.2981 from $1.2976

New York – DOW: DOWN zero.9 percent at 18,094.83 (close)

London – FTSE 100: DOWN 1.Three percentage at 6,818.04 (close)

Trump is essentially

Trump is essentially regarded as a market negative and virtually him doing pretty poorly in the debate would reassure a whole lot of buyers,” he stated.

Sydney fell zero.7 percentage while Jakarta, Manila and Taipei had been additionally down.

Some other Asian markets shrugged off Wall Street’s losses. Hong Kong shares were up zero.Eight percentage, whilst Seoul rose 0.3 percent and Shanghai became flat.

Oil but reversed the day prior to this’s profits in Asia as a producers meeting in Algeria looms.

Members of the Organization of the Petroleum Exporting Countries will meet Wednesday with key non-OPEC producer Russia, at the sidelines of the International Energy Forum.

West Texas Intermediate was down 32 cents to $45.61 at the same time as Brent declined 38 cents to $forty six.Ninety seven.

The looming debate

The looming debate, as well as reports that Berlin has refused country resource to fortify Germany’s Deutsche Bank because it faces a multibillion-greenback exceptional inside the United States, had helped send worldwide markets widely decrease Monday.

Tokyo observed the trend dropping zero.Three percent by the wreck, however had pared early losses as buyers centered at the debate.

The dollar additionally reinforced in opposition to the Japanese forex all through the talk, shopping for one hundred.70 yen, from 100.38 yen in early trade.

A weaker currency is a plus for Japan’s exporters, as it boosts the foreign places profitability of exporters.

Angus Nicholson, a Melbourne-based marketplace analyst at IG Ltd., instructed Bloomberg the shift ought to probably be a end result of Clinton doing nicely at some stage in the talk.

HONG KONG: Asian

HONG KONG: Asian markets fluctuated Tuesday as all eyes grew to become to the first presidential debate among scuffling with US presidential candidates Donald Trump and Hillary Clinton.

The White House hopefuls, in a virtual useless warmth in polls with slightly six weeks earlier than the November 8 election, took the level in what became set to be the most watched US political event in years.

“The first of three US presidential candidate debates all through nowadays’s Asia Pacific trading consultation will likely dominate movement as markets search for the winner and their eventual financial policy stance,” Michael McCarthy, chief market strategist in Sydney at CMC Markets, said in an email word.

“Markets are attempting to find the least worse alternative among the 2 US applicants… Any notion that the outsider candidate received the talk could deliver a market rout.”

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