THE MAIN INDEX will likely see thinner volume during the shortened trading week as foreign fund managers take a break for the holiday season.

The 30-member Philippine Stock Exchange index (PSEi) finished in the green last Friday, rising 0.64% or 54.03 points to 8,432.31, before taking a two-day break on Dec. 25 and 26 for the Christmas holidays.

“Local participants might dominate the week’s three-day trading session focusing mostly on second- and third-tier shares. Any weakness in select large-cap stocks would be a good window for players to move in, especially those with good stories to unfold next year,” online brokerage 2TradeAsia.com said in a weekly market note.

The online brokerage added that investors will be watching out for the capital expenditure (capex) programs of listed firms, as this would dictate their growth prospects in 2018.

Among the companies that have already announced their capex programs for 2018 are Metro Pacific Investments, Corp. (MPIC), Ayala Land, Inc. (ALI), and Aboitiz Equity Ventures, Inc. (AEV).

MPIC has set its spending for next year at P100 billion as it focuses to grow its tollroads, power, water, rail, hospital, and logistics businesses. For its part, property giant ALI disclosed that while it has yet to set the final figure, its capex could reach P100 billion in 2018 as they launch more residential projects, counting on the surge of demand for more housing developments.

Meanwhile, AEV will be trimming its capex to around P40-P50 billion in 2018, lower than the P77 billion it allotted this year, while still focusing on the growth of its power business.

As this will be the last week of trading for this year, analysts are already placing bets that the bellwether index could rally to breach the 9,000 mark next year.

First Grade Finance, Inc. Managing Director Astro C. del Castillo noted that this could come on the back of the Tax Reform for Acceleration and Inclusion (TRAIN) Act signed by President Rodrigo R. Duterte earlier this month.

“The political will of the president in getting the necessary legislations passed will help push investor sentiment up, and easily push the index toward the 9,000 level in 2018,” Mr. Del Castillo said in an interview last week.

Changes in the country’s tax program will be implemented come Jan. 1 as part of the first of five packages under TRAIN.

“As the news gets finally absorbed, anticipate some fund managers to lock in on rallies, until the net benefit of the sector gets known,” 2TradeAsia.com said.

Analysts pegged the market’s immediate support within the range of 8,370 to 8,400, with resistance from 8,500 to 8,570.

Meanwhile, Wall Street’s major indexes dipped on Friday in low trading volume before the holiday weekend as several blue-chip stocks slipped, including Nike.

President Donald J. Trump signed a massive $1.5-trillion tax overhaul into law on Friday and also approved a short-term spending bill that averts a possible government shutdown. — A.B. Francia with Reuters

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