Market seen closely watching Duterte’s Sona

A mix of domestic and external factors will keep investors busy this week, as the benchmark Philippine Stock Exchange index hovers just below the key 8,000 mark.

The PSEi ended a volatile week with a gain of 1.3 percent to 7,989.73.

Luis Gerardo Limlingan, managing director at Regina Capital Development, said investors would be closely watching President Duterte’s State of the Nation Address, which was sometimes used as a platform to outline business policy.

Also coming up are second quarter 2017 earnings, although Limlingan said expectations would be tempered.

“It will be difficult to match earnings from [second quarter 2016] because that was the height of the election season,” he said.

Investors will also be on the lookout for key economic data overseas, including new home sales in the United States, crude oil inventories and the Federal Open Market Committee meeting announcement.

He said technical indicators were showing a mixed outcome.

“Last week, PSEi reached 8,000, forming a triple top in a span of two months. It was not able to trade above the said resistance; prices went down, reaching its immediate and strong support at 7,880 which happens to be its 50-d and 20-d MA,” he said.

The broader theme for the next 12 months are tax reform and the rollout of infrastructure projects, BDO Nomura Securities research head Dante Tinga Jr. said last week.

Tinga said they expected the PSEi to hit about 8,500 in 12 months. He said the PSEi would move higher if the Duterte administration could convince investors it would follow through on those goals.