PHL shares to rise as investors hope for recovery
By Denise A. Valdez, Senior Reporter
LOCAL SHARES are seen to recover this week due to improved investor sentiment as September starts.
The bellwether Philippine Stock Exchange index (PSEi) closed Friday’s session lower by 37.37 points or 0.63% to 5,884.18. On a weekly basis, the benchmark index declined 2% or 121.22 points.
Value turnover was up 71% to an average of P9.09 billion, but net foreign outflows grew more than double to an average of P972.41 million.
“The market is expected to rebound around 5,700-5,800 levels amid recovery hopes as we enter ‘ber months,’” Philstocks Financial, Inc. Research Associate Claire T. Alviar said in a text message.
She noted the holiday season may signal improved consumer spending, backed by an expectation that lockdown restrictions will be eased in the months ahead.
“[S]pending could be better than the previous months this year but we don’t think that it would exceed last year’s spending as the country is still challenged by the COVID-19 (coronavirus disease 2019) pandemic,” Ms. Alviar said. “We are hopeful but not as optimistic as before.”
In August, the PSEi was flat with a 0.75% decline from in July. Ms. Alviar attributed this to the initial market drop when a stricter lockdown was imposed for two weeks, then a rebound when news of a COVID-19 vaccine and the recomposition of the PSEi member stocks came.
But the month of September may also signal volatility as investors anticipate increased climate risks due to La Niña, online brokerage 2TradeAsia.com said.
“With increased chances for La Niña to occur during September (50-55% chance), expect investor sentiment to exacerbate guarded sentiment given the climate risk exposure of key engines of the economy (agriculture, tourism, energy),” it said in a market note.
This week, investors will watch out for the August manufacturing data to be released on Tuesday and the August inflation data to be released on Friday.
“We’re going to see the impact of the reversion of Metro Manila and nearby areas (to stricter quarantine) in August. If it comes lower than July’s figure of 48.4, then it may weigh on the market,” Ms. Alviar said.
“With participation improving and the PSEi’s trading band narrowing, the next aspiration will not only be on trumping the 6,000 level again, but also establishing higher lows (from the 5,800 level). Doing so will put the index at a more exciting technical space, to north of 6,000-6,200,” 2TradeAsia.com added.
The brokerage is putting immediate support for the PSEi at 5,700, and secondary support at 5,500, with resistance at 6,000.
