Shares to climb on positive inflation, GDP data
By Denise A. Valdez
Reporter
SHARES may rise this week on the release of likely positive October inflation and third-quarter gross domestic product (GDP) data, along with the continuation of corporate earnings filings.
After three straight days of gains, the Philippine Stock Exchange index (PSEi) ended last Thursday’s trading session down 42.94 points or 0.53% to close at 7,977.12. The local bourse was closed on Friday in observance of All Saints’ Day.
On a weekly basis, however, the main index was still able to record a 0.69% growth during the four-day trading week versus the prior week.
Last week also saw the PSEi reach the 8,000 level for the first time since Aug. 2 when it closed at 8,020.06 on Wednesday. However, its immediate surrender the next day showed the market is “not yet prepared for 8,000,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said last week.
“We still need compelling factors that can lift our market above the crucial resistance line. And these factors may come next week,” Mr. Tantiangco said in a text message Thursday, referring to the October inflation report, third-quarter GDP data and corporate earnings.
The Philippine Statistics Authority is scheduled to release inflation data on Tuesday and GDP data on Thursday. Listed firms will also continue filing their earnings reports until the Nov. 15 deadline.
AAA Southeast Equities, Inc. Research Head Christopher John Mangun named the same factors as among what he expects will influence the local bourse this week. In a market, he said inflation likely remained on a downtrend, while no surprises are expected in the third-quarter GDP data .
“However, the recent pick up in infrastructure spending and consumer spending may have a better than expected effect on growth. This may also give investors an extra boost of confidence to get back into this market,” he said.
Philstocks Financial’s Mr. Tantiangco said if the local data due for release this week will be favorable, there is a chance for the main index to return to the 8,000 level.
“A slower October inflation print and good corporate figures could also give us a boost,” he said.
However, AAA Southeast Equities’ Mr. Mangun warned that the PSEi going above the 8,000 mark could result in sellers overwhelming buyers.
“We need to see a pickup in trading volumes in the coming weeks for this market to rally higher. The current buying pressure is not going to be enough for this market to go higher,” he said.
Turnover value last week stood at P26.26 billion, with foreign inflows logging net purchases worth P1.75 billion.
“Foreign inflows have been an unexpected positive which will help the general sentiment improve if it continues… More foreign inflows may find its way into local equities before the end of the year which may be a pleasant revelation for everyone,” Mr. Mangun said.
