MANILA, Philippines — The local stock market is expected to perform better this week following the Holy Week break and the latest report of a decline in inflation.
In March, inflation eased to 7.6 percent, better than February’s print of 8.6 percent, and within the Bangko Sentral ng Pilipinas’ range of 7.4 to 8.2 percent for the month.
Unicapital Securities, however, said that while inflation eased to 7.6 percent in March the “jump of crude oil prices due to the reduction in OPEC + output and anticipated volatility in crude oil markets could contribute to inflationary pressures in April.”
Last week, the benchmark Philippine Stock Exchange Composite index (PSEi) slipped to 6,488, declining by 11 points or down week-on-week by 0.17 percent.
Due to a shortened trading week, average value turnover tumbled by 40.7 percent to P3.82 billion, while foreigners turned net sellers with an average value of P66 million. This was compared to a net buying of P546 million last week.
Against this backdrop, 2TradeAsia sees immediate support at 6,400 points, with resistance at 6,650 to 6,750.
For the coming weeks until May, 2TradeAsia sees lackluster movements in the market as “prudent funds wait for the broader picture to become more conducive for bolder plays.”
“It will be mostly an anticipation game in the coming weeks,” the stock portal said.
The Asian Development Bank retained its six percent growth outlook for the Philippines this year, a slight contraction from last year’s 7.6 percent. Similar institutions have forecasted around this number, with a slight acceleration in 2024.
“First quarter GDP will not be available until May 11. This will be about a week after the next Fed meeting (May 2 to 3) and just after the Bangko Sentral ng Pilipinas’ board meeting on May 18. Earnings results for the first quarter will be right around this time as well,” 2TradeAsia said.
For its part, The Market Call, said “early indications of first quarter 2023 corporate earnings will likely tip the balance – north or south – in the second quarter.”
The Market Call is a joint publication of the First Metro Investment Corp. and UA&P Capital Markets Research.