Market may weaken further this week

MANILA, Philippines – Share prices may retreat further this week as the local stock barometer is seen trading between the 6,850 and 7,150 levels as the general sentiment remains negative, analysts said.

Last week’s bounce may be short lived — on account of the country’s better-than-expected third quarter economic growth — as investors remained on the sidelines awaiting the next move of the US Federal Reserve, said Jonathan Ravelas, chief market strategist at Banco de Oro.

“The market barometer PSEi bounced off the week’s low of 6,857.15 to close at 7,067.73 after the government reported a faster than expected third quarter GDP growth of 7.10 percent year-on-year against the 6.70 percent consensus forecast compiled by Bloomberg,” he said.

Ravelas said the market rallied to as high as 7,115.76 but surrendered most of its gains toward the end of the trading week following US Federal Reserve chair Janet Yellen’s statement that an interest hike could be imminent.

Yellen told lawmakers last week that since the US job market and other economic indicators continue to improve, a move to raise interest rates “could well become appropriate relatively soon.”

In a market commentary, 2TradeAsia.com said indeed, the Fed’s rate hike is now the focus of investors and no longer the Trump presidency as much as before.

“With Dow Jones Industrial Average (DJIA) gaining three percent since the Nov.  8 election, it appears that investors are now shrugging off any concerns on the looming new US government. It seems they’ve already factored into their portfolios what stocks could benefit from the new administration’s proposed policies. Clearly, president-elect Trump announced some of his plans, and these include ramping up government spending, reducing corporate income taxes, lessening environment and financial regulations, among others,” it said.

Furthermore, the online market research portal said investors are seen to start embracing the idea of a Fed rate hike.

“Pricing-in all these political factors, the Federal Reserve reiterated its intent to hike interest rates and of course, Fed as being data-dependent, economic data releases are pointing to a better US economy,” it said.

Meanwhile, the Philippine Stock Exchange’s trading participants continue to work on improving trading practices in the local bourse.

The Philippine Association of Securities Brokers & Dealers Inc. (PASBDI) is hosting the 21st Annual General Meeting of the Asia Securities Forum (ASF) from Nov. 20 to 22 at The Conrad Manila.

“We are pleased to welcome ASF delegates to Manila. PASBDI is honored to host this forum for securities trading practitioners all over Asia where we can share and learn from each other best practices and developments in the field of securities and capital market. We hope to take this opportunity to also showcase the exciting developments and progress in the Philippines as a whole,” said PASBDI chairperson Ma. Vivian Yuchengco.

The ASF was established in 1995 as a means for the securities industry in Asia-Pacific to exchange views and information for the development of securities markets and economic growth in the region. This is the third time that PASBDI is hosting the ASF.