PSEi seen moving up
The benchmark Philippine Stock Exchange index could move higher in the coming days, following a rally late last week. However, any significant gain could be capped by volatility arising from a possible rate hike by the United States Federal Reserve.
Jonathan Ravelas, chief strategist at BDO Unibank Inc., described gains made toward the end of last week as a “technical bounce,” led by bargain hunters snapping up stocks.
The PSEi was still down 0.31 percent week-on-week to 7,503.72 on Thursday’s close, although that’s an improvement after sliding to as low as 7,272.36. Trading closed early last week as the country celebrated its Independence Day on Friday.
“Now that we closed above 7,500, this gives room for more upside, possibly toward 7,850,” Ravelas said in an interview.
A looming decision from the Federal Reserve on a possible rate increase could limit any upside, Ravelas noted.
“The main culprit is the possible rate hike in the US,” he said, adding that the broader Philippine economic fundamentals remained intact. He said BDO was keeping its 7,800 year-end target for the PSEi, while the Philippine peso was expected to end at 45.50 to the US dollar.
Stock brokerage firm I.B. Gimenez Securities echoed Ravelas’ sentiments, saying the Federal Reserve’s interest rate decision will be the “main focus” for the week.
It said trading for the week could be “volatile” with consolidation occurring early in the week and the Federal Reserve’s announcement Thursday to “determine the market movement for the rest of the week.” Miguel Camus
