Another volatile week seen for stock market

MANILA, Philippines — The stock market is expected to experience another volatile session this week as traders wait for the passage of the tax reform program of the Duterte administration, analysts said.

“Market participants will wait with bated breath legislators’ agreement on the final tax reform plan, which should bring about increased disposable income and savings,” 2TradeAsia said.

Immediate support is expected at 8,270 to 8,300, while resistance mark is at 8,400 to 8,470.

It said that last week optimists prevailed on positive expectation of third quarter earnings and in US President Trump’s tax overhaul proposal. 

“While we anticipate another volatile session given the tug-of-war between buyers and sellers, the overall backdrop is growth-affirmative, supporting valuations aided by strong fundamental,” according to online market portal 2TradeAsia.com.

Analysts said the market would watch closely key developments such as the much awaited passage of the Duterte administration’s tax reform program, which the government wants to be put in place this year.

“Sector beneficiaries include retail-related shares, banks and property.  Improved consumer spending should also encourage higher capital spending from listed firms, ahead of budget planning initiatives for 2018.  Timed with the Yuletide season, sentiment is bound to ride on improved liquidity, especially with the seasonal uptick in remittances.  Increased loan take-up and/or higher fee-based receipts are in store for those engaged in the financial industry,” it also said.

“Furthermore, the administration’s strong thrust on its infrastructure drive provides a plus on the Philippine’s gross domestic product story.  This infra rollout is bound to trickle down to key sectors, as it opens up opportunities to expand business investment and employment,” 2TradeAsia said. 

2Trade said shares with solid infra-based directions would benefit from this as well as energy related companies such as Meralco.