PHL stocks to move higher on relaxed travel rules
By Denise A. Valdez, Senior Reporter
PHILIPPINE SHARES are expected to show signs of improvement this week as travel restrictions are relaxed and investors keep an eye on the talks for the 2021 national budget.
The benchmark Philippine Stock Exchange index (PSEi) slid 39.86 points or 0.67% to close at 5,898.47 on Friday. It kept moving sideways throughout the trading week, resulting in a week-on-week decline of 33.14 points or 0.56%.
Value turnover went down 41% to an average of P5.53 billion, but net foreign selling was trimmed 29% to an average of P726.6 million.
“The local bourse maintained its sideways trade, range-bound between the 5,954-5,898 trading range amid a slew of new headlines, including change in Philippine Congress leadership,” online brokerage 2TradeAsia.com said.
After weeks of disagreement that threatened to delay the passage of the 2021 spending plan, the House of Representatives named Lord Allan Q. Velasco as new House speaker last week.
However, 2TradeAsia.com said market participants are often wary of change-of-hands in politics, so sideways trading may continue until stronger drivers come in the coming weeks.
“In other words, we are not yet out of the’ perfect storm’ that is 2020, and for those invested in equities, the safest bets would be holding on to safe rafters—such as dividend stocks and defensive conglomerates,” it said in a market note.
But for this week, investors may gain some confidence from the relaxing of quarantine restrictions allowing non-essential outbound travel starting Oct. 21, AAA Southeast Equities, Inc. Research Head Christopher John Mangun said.
“The PSEi may move higher (this) week as investors get a boost of confidence from the easing of restrictive quarantine measures… The recent developments are a major change in the government’s strategy in combating the pandemic as it focuses on spurring economic growth in the fourth quarter,” he said.
2TradeAsia.com said the news will attract foreign investments, generate local employment, benefit the country’s trade account, and result in lower prices of goods.
But until more concrete developments materialize, Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said the market may continue moving within range.
“Worries over the current economic situation and its outlook amid COVID-19 (coronavirus disease 2019) risks are still expected to weigh on sentiment. Investors may also wait for further cues primarily the third quarter corporate reports for better guidance on their decision making. Thus, the market could move sideways next week under lethargic trading,” he said in a text message.
2TradeAsia.com set immediate support at 5,700 and resistance within 6,000 to 6,150. AAA Southeast Equities’ Mr. Mangun expects support within 5,830-5,690 and resistance within 6,020 and 6,165. Philstocks’ Mr. Tantiangco put the PSEi’s range within 5,830 to 6,100.
