AB Capital Securities research head Jovis Vistan said trading will remain sideways with the delay in the election tally and the higher oil prices on interest rates still causing some jitters to investors.
"The market will remain in such a state until the proclamation of the country’s next president," Vistan said.
Last week, the main composite index fell 6.45 points or 0.42 percent week on week to 1,518 as investors failed to set aside their concerns on the slow canvassing of the May 10 election results and a looming interest-rate hike.
Vistan said concerns were heightened when the two chambers of Congress adjourned as a legislative body even as the counting of votes for the president and vice president positions were not even half way. The 22-man joint committee, however, is now exerting all their efforts to finish the canvass in two weeks time.
RCBC Securities said delays in the canvassing have proven to be a strong deterrent to the market’s rise with some economists and businessmen stating that the slow pace of the counting would bring about adverse effects on the economy, in terms of lower investor confidence.
"What most market players fear is that if some legislators continue to derail the process, then the canvassing may not be finished by June 30, the deadline mandated by the Constitution for proclaiming the presidential and vice-presidential winners," RCBC Securities said.
RCBC Securities said prospects of rising consumer prices are likely to translate into higher interest rates, already observed in movements in treasury bill rates. "This would likely have a negative impact on the market although the negative effects would be more pronounced on property counters," RCBC Securities said.
Grace Cerdena of 2tradeasia.com said investors shall monitor consumer price changes following the latest announcement of an increase in electricity bill rates and fuel prices.
Vistan said if corporate profits continue to rise despite the rise in interest rates then stock prices should be able to climb later this year.
He has advised investors to refrain from making large bets until they get a better handle on whether there will be a proclamation of a new President on June 30 and what the US Federal Reserve might do on its upcoming meeting.
"Stay defensive, sit back and take a look at how the canvassing will turn out next week. Another key will be how the losing Presidential candidate and his or her supporters will take defeat," Vistan said. Vistan said the market is expected to trade between 1,510 and 1,560.
Vistan, however, maintains his positive outlook for the fourth quarter as the economy is doing well and oil prices have stabilized. "The investment environment has been improving and once we have gotten past the negatives share prices should rise correspondingly," he said.