By Denise A. Valdez

LOCAL SHARES may trade higher early this week as investors can be expected to cheer signs of progress in Sino-US trade talks last Friday.

The Philippine Stock Exchange index (PSEi) ended flat at 7,932.96 on Friday, a 0.75-point decline from a day earlier. The broader all-shares index gave up 5.92 points or 0.12% to 4,751.81.

On a weekly basis, the PSEi fell 1.65% from 8,065.76 on Nov. 8 due to thin trading volumes, putting an end to the five consecutive weekly increases. A slowdown in foreign inflows likewise dragged the market.

Value of trades stood at P25.77 billion last week, lower than the P33.96 billion recorded a week ago. Foreign investors recorded net selling of P2.43 billion for the week, against P722 million earlier.

In a market note, AAA Southeast Equities, Inc. Research Head Christopher John Mangun said the main index may bounce this week back to the 8,000 level. “With all the losses we saw last week, the PSEi was able to end slightly above the 7,920 support level which gives us some optimism… However, if we see a situation like last week, (where there were) low trading volumes and massive foreign outflows, the main index will continue lower and test the next support at 7,800,” he said.

Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said the PSEi may end within the 7,900-8,100 level this week. “Market may rebound this week with the positive development in the phase 1 US-China trade negotiation,” he said in a text message Sunday.

China state-run Xinhua News Agency reported Sunday that top US and China negotiators had “constructive discussions” for the first phase of a trade deal. Citing Chinese Vice-Premier Liu He who took part in the talks, the report said representatives of the two countries threshed out “core concerns” by phone on Saturday morning and agreed to maintain constant communication.

For Regina Capital Development Corp. Head of Sales Luis A. Limlingan, this week’s trading may also take cues from the October balance of payments data to be released by the Bangko Sentral ng Pilipinas on Nov. 19 and the minutes of the latest Federal Open Market Committee meeting. “In the Philippines, (overseas Filipino workers) remittances were encouraging to end the week, and we will watch out for the balance of payments. Most major earnings are out so funds may even start to position ahead of 2020 with around 6-7 weeks left,” Mr. Limlingan said in a mobile phone message.

Mr. Mangun of AAA Southeast Equities said the upgrade by Fitch Solutions of its Philippine economic growth forecast for 2019 to six percent from 5.8% may also inspire investor optimism. “2020 is going to be a big year for our market; we see a big move coming in the next few months… With consistent economic growth and supportive government policy, we see the market going higher,” he said.