PSEi poised to end year in the green

MANILA, Philippines — The Philippine Stock Exchange index (PSEi) is set to end the year on a positive note, according to Juan Paolo Colet, managing director of China Bank Capital Corp.

“The final three trading days of the year will see a mix of window dressing and bargain hunting with the index poised to end 2023 on a positive note,” he said.

Stock market investors will largely be keeping a close watch on monetary policy moves but are more optimistic now that the US Federal Reserve has said it would loosen rates.

The local rally in stocks is still driven mainly by growing expectations of interest rate cuts next year even after the Bangko Sentral ng Pilipinas has signaled that policy may need to remain tight for some time.

“Investors will also have reason to cheer the cooler than expected US November Personal Consumption Expenditures Price Index, the preferred inflation measure of the Federal Reserve, which reinforced bets that US monetary policy will loosen as soon as March 2024,” Colet said.

Last week, the PSEi gained 22 points to 6,501 or up by 0.35 percent week on week. Most counters jumped except for industrials.

Average market turnover, however, was flattish at P5.58 billion, up by 0.29 percent week on week while average net foreign selling widened to P143 million.

Moving forward, 2TradeAsia sees immediate support at 6,350 with resistance at 6,600.

“The market’s strong ascent is nothing short of surprising, in light of improving macro fundamentals; in fact, this only highlighted how depressed prices are especially relative to regional peers. Expect more buoyant movement in the coming sessions as the December to January season has historically been the most successful trading months for the benchmark index,” it said.

2TradeAsia said bets could be placed on banking, property, and gaming stocks where there is little downside risk.