PSEi to sustain momentum on positive sentiment

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ANALYSTS EXPECT stocks to be more upbeat towards the end of the year with help from various catalysts here and abroad, but economic drivers this month, mainly third-quarter economic growth data, will have to yield positive results to sustain momentum.

“We should be performing between now and December a bit better but I don’t think there’s any run-up unless something positive comes out,” Summit Securities, Inc. President Harry G. Liu said in a phone interview on Wednesday.

Regina Capital Development Corp. Managing Director Luis A. Limlingan said investors will be pinning their hopes on the country’s gross domestic product growth data for the July to September period, as this will give the market a glimpse of the full-year economic performance.

“The third-quarter earnings will also carry the same sentiment, as there will be no effect of election spending,” said Mr. Limlingan in a mobile phone message yesterday.

Mr. Limlingan also noted that after the two-day policy meeting of the US Federal Reserve, money managers will turn to the Bangko Sentral ng Pilipinas’ meeting, in which the central bank is expected to hint on a rate hike, which some believe could happen as early as yearend.

Meanwhile, Summit Securities’ Mr. Liu added that President Rodrigo R. Duterte’s trip to Japan, which has so far had positive results, may also push the local bourse upward in the coming days.

“Not only that, the ASEAN (Association of Southeast Asian Nations) summit must proceed smoothly, and indications of the TRAIN (Tax Reform for Acceleration and Inclusion Act) being passed by yearend should be strong,” Mr. Limlingan added, noting that “it is a challenging task for November, but after all October is a record high.”

On Oct. 17, the Philippine Stock Exchange index (PSEi) hit a fresh record high of 8,497.74, although still falling short of the 8,500-point resistance level.

The Philippine market remained closed on Wednesday for a public holiday.

In the region, Singapore shares hit their highest in more than two years on Wednesday with financials driving the rise, while Indonesia extended gains into a second session on stronger crude oil prices and foreign fund inflows.

Singapore’s FTSE Straits Times Index rose as much as 0.60% to its highest since late May 2015.

DBS Group, the city-state’s top lender, was the biggest boost with a jump of 1.2%, while oil-rig builder Keppel Corp. rose as much as 2% to its highest in over two years.

Brent crude prices were near two-year highs as the Organization of the Petroleum Exporting Countries has significantly improved compliance with its pledged supply cuts and Russia is also seen keeping to the deal.

Indonesia’s Jakarta IDX Composite Index rose as much as 0.40% with energy and financial stocks leading the gains.

Thai shares fell as much as 0.44% before recovering to trade marginally higher. – with Reuters