MANILA, Philippines - Investors will keep a close watch on President Aquino’s last State of the Nation Address (SONA) as the Philippine stock market resumes session today.
The market is expected to test the 7,700 mark this week after closing at 7,655 last week, analysts said.
“We still see the index testing the 7700-mark, an effort stymied by intermittent profit taking with investors still showing less patience to hold stocks on the upside than they do in pricing their buys when the market goes lower, “ said Justino Calaycay of Accord Capital.
Jason Escartin of F. Yap Securities said in his outlook for the week that all eyes and ears will be on the President’s last SONA to get a cue on President Aquino’s successor as well as the economy’s direction, specifically on whether the government would accelerate fiscal spending among other issues.
On Friday, the benchmark PSEi closed 48 points higher at 7,655 led by services (+1.6 percent), industrials (+1.4 percent) and property (+1.35 percent).
Meanwhile, oil-related shares were hammered (-9.3 percent), as crude continued to slide after OPEC members Saudi Arabia and Iraq pushed output to record levels to defend their share.
Escartin said investors this week would also be looking at the US Federal Open Market Committee for direction.
A sooner-than-expected rate increase may dampen appetite for equities, he said.
“Investors may have a reason to curb their optimism as the Fed decides on an impending interest rate hike widely seen this September. In recap, Fed chairman (Janet) Yellen previously said she would rather raise rates earlier to account for ‘gradual’ pace of rate hike even as policy would remain highly accommodative for ‘quite some time’. The initial stigma of a sooner-than-expected rate increase might dampen appetite for equities, but diversification should propel fund managers to optimize returns,” he said.