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PSEi to move sideways amid global uncertainties

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NORTH KOREA and the global tension it is creating remains as among the biggest market movers this week as the investing community awaits the results of the United Nations (UN) Security Council meeting on Sept. 11.

On Friday, the Philippine Stock Exchange index (PSEi) closed at 8,022.75, barely moving from the previous day.

Week on week, the bellwether index was higher than its 7,958.57 close last Aug. 31.

2TradeAsia, online arm of F. Yap Securities, Inc., said for this week, investors would focus on the UN members’ vote on whether to support the sanctions against Pyongyang after its “unabated” missile tests.

“So far, the US raised its call to ban crude oil shipments to [North Korea],” it said, citing the list to include a ban on that country’s textile exports, a prohibition on overseas employment and a freeze on the assets of Kim Jong Un.

The US on Friday told the UN Security Council that it intends to call a meeting on Monday to vote on a draft resolution establishing additional sanctions on North Korea for its missile and nuclear program, the US Mission to the UN said in a statement.

The US wants the Security Council to impose an oil embargo on North Korea, ban its exports of textiles and the hiring of North Korean laborers abroad, and to subject leader Kim Jong Un to an asset freeze and travel ban, according to a draft resolution seen by Reuters on Wednesday.

It was not immediately clear how North Korean ally China and Russia would vote, but a senior US official on Friday night expressed skepticism that either nation would accept anything more stringent than a ban on imports of North Korean textiles.

A Security Council resolution needs nine votes in favor and no vetoes by permanent members Britain, the US, France, Russia or China to pass.

2TradeAsia.com also noted that “the vacuum that will be created in the Fed[eral Reserve] from vice-chairman Stanley Fischer’s October departure might keep policy stances on hold for now.”  Mr. Fischer’s resignation comes with the expected expiry of Fed chair Janet L. Yellen’s term in early 2018.

The brokerage said efforts are likely to be concentrated on recovery efforts post-Hurricane Harvey and Irma’s wrath, while waiting on the move from the US on its debt ceiling issue.

“We view this continuing this week, possibly with stronger emphasis on sectors that would benefit most ahead of the 4Q (fourth-quarter) seasonal spending kick,” it said, citing retailers, banks and property developers.

“Several might be inclined to position ahead of the much-anticipated approval of the tax acceleration program of the administration, prior to its implementation in 2018,” it added.

It advised investors to aim for modest gains while the PSEi is moving within a sideways pattern.

“Immediate support is 7,970, resistance 8,050-8,100,” it said. — VVS with Reuters

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