Trading on the main Philippine Stock Exchange index could remain volatile this week, with investors seen to test even lower levels after the PSEi breached a key barrier last week.
The benchmark index, which lost over 2.6 percent for the week to 8,144.02 on Friday’s close, was long overdue for a correction, said BDO Unibank Inc. chief strategist Jonathan Ravelas.
He said the 8,150 level was an important barrier, noting that a close below this level indicated the possibility of further decline. He said the weekly decline at the PSEi of this magnitude was seen in the last week of December 2016.
Ravelas said investors were pocketing gains in what had been a relatively good year. The PSEi, while down from its 8,600 high in early November, was still up 19 percent since the start of 2017.
This was propped up by plenty of good news, he noted, including better than expected growth in the economy and progress made in tax reform. He called the correction “healthy.”
Despite this, there was some risk moving forward. Ravelas said the next key support level hovered around the 8,000 level. Should the market rebound, there was a chance to hit 8,300 or slightly above that in the near term.
Trading volume on Friday hit 1.48 billion shares, valued at P9.74 billion. The PSEi sank 1.33 percent on Friday alone.
Ayala Land Inc. was the most actively traded on Friday as it lost 1.4 percent to P42.20 per share.
The builder was followed by Manila Electric Co., down 3.05 percent to P305.40; BDO Unibank Inc., up 0.68 percent to P147; SM Investments Corp., down 0.72 percent to P963, and Globe Telecom, down 1.86 percent to P1,796 per share.