Local stocks are seen taking their cue from President Aquino’s State-of-the-Nation Address (Sona) this afternoon and the start of the corporate-earnings reporting season this four-day trading week, which also ushers in the so-called “ghost month.”
Last week, the main share Philippine Stock Exchange index (PSEi) gained 36.48 points or 0.53 percent to close at 6,889.55 on Friday.
Joyce Ann Ramos, analyst at AB Capital Securities, said thin trading was the theme of the stock market last week as investors chose to stay on the sidelines due to a lack of significant catalyst to push or pull the market.
“This cautious stance of the market participants has been reflected in the tight band that the index traded on in the past few weeks,” Ramos said. “We
believe that this waiting game will continue in the coming four-day week as investors will have to digest the content of President Aquino’s Sona as well as wait for the release of the second-quarter corporate earnings to guide them on whether to push the market back to and past the 7,000 level or not.”
The market is on holiday tomorrow in observance of the Eid-al-Fitr (Feast of Ramadan).
Should the earnings turn out better than expected, Ramos said this would give investors the incentive to drive up the market, noting that 7,000 had been a tough barrier recently.
For the meantime, she said investors would most likely adopt a wait-and-see stance.
Among the key economic updates to be expected this week are US’ FOMC statement, unemployment rate and estimated annualized GDP and China’s manufacturing gauge, she said. Doris C. Dumlao