Market uncertainty likely to prevail

MANILA, Philippines – Uncertainties continue to prevail in the stock market, putting investors mostly on the sidelines due to lingering concerns over the pandemic, according to analysts.

Immediate support is expected at the 6,000 level, while major support is at 5,850, said Michael Ricafort, chief economist at Yuchengco-owned Rizal Commercial Banking Corp.

Major leads or catalysts for the local financial markets for this week include any further increase in the amount of Retail Treasury Bonds (RTBs) raised by the government and other fund-raising through the bond market by some large companies, as well as  equity market such as the real estate investment trusts that could entail some foreign buyers.

“However, new RTBs and other private fund-raising activities could potentially sap some of the excess liquidity in the financial system and could also compete with demand for other existing securities,” Ricafort said.

According to Ricafort, the trend in new COVID-19 cases here in the country, in some US states, and in other countries could still affect market sentiment in terms of any potential adverse economic effects.

On Friday, the PSEi declined by 58.91 points or one percent to close at 6,088.75, the lowest in more than two weeks or since June 29 and also among one and a half-month low since June 3, 2020.

This, Ricafort said, was partly brought about by the continued increase in new local COVID-19 cases that could have some adverse impact on the pace of economic recovery amid some risk of possible tighter quarantine standards especially in Metro Manila.

For the week, the PSEi declined for the second straight week by 108.63 points or 1.7 percent.

Since the start of 2020, the PSEi already declined by 1,726.51 points or 22.1 percent as against 7,815.26 as of end-2019.