PHILIPPINE SHARES may climb this week amid thin trading after the holidays as investors expect a better year for corporates and the economy in 2023.

The bellwether Philippine Stock Exchange index (PSEi) inched down by 0.15 point to close at 6,566.39 on Dec. 29, while the broader all shares index rose by 12.71 points or 0.36% to 3,462.04.

Week on week, the PSEi closed higher by 25.36 points or 0.39% from 6,541.03 on Dec. 23.

Philippine financial markets were closed on Dec. 30 and Jan. 2.

“On a shortened trading week and ahead of 2023, the PSEi moved sideways, ending the week a little bit higher… Save for industrials (-0.10%) and holdings (-0.16%), most sectors rallied, primed by mining & oil (+2.36%), and property (+1.82%),” said in a market report.

For this week, Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said the market may move with an upward bias amid market optimism.

“In the last five years, from the previous year’s close to the first trading Friday of the current year, the local market has gained by 1.46% on average… The period observed shows that investors have greeted the new year with optimism attributed to positive economic and corporate outlooks. For the same reasons, we may see the market move with an upward bias in its first week this 2023,” he said.

“However, a strong rally may not be seen yet as investors also deal with risks that tempers growth prospects. This includes the country’s inflation situation, rising interest rates, and a possible global economic slowdown amid lingering headwinds from the US’ monetary tightening, to the Russia-Ukraine war, to China’s COVID-19 (coronavirus disease 2019) situation,” Mr. Tantiangco added.

Philippine headline inflation is seen to have settled within the 7.8% to 8.6% range in December due to higher electricity rates and rising prices of agricultural goods, the Bangko Sentral ng Pilipinas (BSP) said on Thursday.

The Philippine Statistics Authority will release December and full-year 2022 inflation data on Jan. 5.

The BSP has raised benchmark interest rates by 350 basis points (bps) since May in its fight against rising inflation. Meanwhile, the US Federal Reserve has raised borrowing costs by 425 bps since March.

Both are expected to continue tightening this year as inflation remains elevated amid supply constraints. said the main catalyst for trading this week will be the December inflation report.

“This information dump early in the year may usher broad-based volatility, but also forces monitoring of other key inputs, such as labor data, forex (foreign exchange) and crude oil, both of which can complicate stories for 2023,” added. put the PSEi’s support at 6,350 to 6,400 and resistance at 6,600, while Philstocks Financial’s Mr. Tantiangco placed the PSEi’s immediate resistance at 6,600. — J.I.D. Tabile