By Arra B. Francia
Senior Reporter

SHARES may trade sideways this week as investors remain cautious about the US-China trade war as well as whether the Philippines will meet its economic growth target.

The benchmark Philippine Stock Exchange index (PSEi) went up 0.44% or 35.28 points to close the week at 7,933.47 last Friday.

It was up by 0.58% on a weekly basis, driven mostly by gains in the mining sector which benefited from Indonesia’s ban on nickel exports. Property also gained for the first time in two weeks, while the other four counters ended in the red.

Turnover reached P33.45 billion last week, while net foreign selling persisted at P2 billion.

“Overall, the investor sentiment remains very cautious and investors continue to look at opportunities in second-liners and speculative issues,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in a market report.

Mr. Mangun noted that nothing has given investors the confidence to buy into the market, even with inflation falling to 1.7% in August and the peso getting stronger.

He added that trade tensions between the United States and China also continue to spook investors.

“Investors are expecting an interest cut at the Bangko Sentral ng Pilipinas’ (BSP) next meeting as inflation is lower which will be good for corporate growth. The big concern is whether gross domestic product (GDP) for the year can meet the 6% target of the government,” Mr. Mangun said.

The central bank is scheduled to hold its policy meeting on Sept. 26. BSP Governor Benjamin E. Diokno has earlier hinted on more rate cuts. The BSP has already reduced benchmark rates by 50 basis points (bp) this year or by 25 bps each on May 9 and Aug. 8.

Mr. Diokno also plans another reserve requirement ratio cut within the year.

For Papa Securities Corp. Sales Associate Gabriel Jose F. Perez, the main index’s movement will continue to depend on US markets’ movement.

“Bias continues for the index to reach the critical 8,000 level resistance [this] week — continue to watch out for US market movement if they return to their recent highs,” Mr. Perez said in an e-mail.

Last week, Taiwanese firm Cal-Comp Technology (Philippines), Inc. and Metro Pacific Hospital Holdings, Inc. applied to conduct initial public offerings worth up to P10.87 billion and P83 billion, respectively.

“(This is) the most we have seen in years, which could be the reason why investors are careful and very selective in buying listed companies right now. After the success of KPPI, investors may be more interested in buying companies that are about to list,” AAA Equities’ Mr. Mangun said.

Mr. Mangun placed the market’s support at 7,630 to 7,750, with resistance from 7,920 to 8,000.

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