Home Editors' Picks Shares seen to decline on final week profit taking
Shares seen to decline on final week profit taking
PHILIPPINE shares are expected to trade sideways this trading week as investors book profits while waiting for updates on the new strain of the coronavirus disease 2019 (COVID-19), which hit the United Kingdom (UK) earlier this week.
The bellwether Philippine Stock Exchange index (PSEi) closed Wednesday’s session at 7,204.38, higher by 1.99 points or 0.027% than the previous trading day.
Week on week, the benchmark index inched down 0.84% or 68 points.
The market’s average value turnover slid 14.1% week on week to P8.5 billion, while average net foreign selling decreased 31.9% week on week to P510 million.
Darren Blaine T. Pangan, head of online trading at Timson Securities, Inc., said that updates on the new COVID-19 strain and the government’s decision to extend the ban on travel from the UK for two more weeks might lead to more profit taking during the last two trading days of the year.
“The recent developments might give market participants a reason to stay cautious, thus urging them to lessen their exposure from the market by taking profits for the meantime,” Mr. Pangan told BusinessWorld via Viber.
He added that this “might affect the market by trading sideways, if not moving lower to retest its nearest support at 6,800.”
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in an e-mail that the local markets anticipated President Rodrigo R. Duterte’s final approval of the 2021 national budget on Dec. 28 and the possible final extension of the availability of national budget funds for 2021.
“The markets are also anticipating further progress on the Corporate Recovery and Tax Incentives for Enterprises Act Bill, [which] could become the country’s biggest stimulus measure, especially after the final approval of the 2021 national budget,” Mr. Ricafort said.
Meanwhile, online brokerage 2TradeAsia.com said in a market note that the local bourse will be affected by the COVID-19 pandemic, which it described as the “single biggest threat to risk asset-investing.”
“This supports not only a guarded outlook for full economic reopening plays (such as aviation, tourism, and leisure), but also that COVID-19, at the end of the day, remains to be a developing case. In this regard, market participants may have to brace for extra volatility in the coming weeks,” the brokerage said.
2TradeAsia estimated that the market’s immediate support will be at 7,070, while its resistance will be at 7,300. — Angelica Y. Yang