Market awaits fresh catalysts from President’s Sona
All eyes and ears are on President Duterte’s third State of the Nation Address (Sona) today as investors await fresh catalysts for the stock market.
The main-share Philippine Stock Exchange index (PSEi) ended flat at 7,339.61 on Friday compared to the previous week’s finish of 7,399.18. It hit an intraday high of 7,459.14 during the week.
“The president will be giving his State of the Nation Address which may give investors the assurance that they have been longing for. This event may turn out to be the catalyst to get investors back into the market,” said Christopher Mangun, head of research at stock brokerage Eagle Equities Inc.
“The alternative is that we continue to trade low volume and the market starts to go sideways,” he said.
Mangun noted that the index had been trading in an upward trend since the start of July, so far gaining 2.9 percent this month, after bottoming out at 7,000 in the last week of June.
“If the index continues to trade within this trend channel next week, we may see it test and break the 7,500 level, a strong resistance level technically and psychologically. Going above that level will confirm the reversal and signal that we are out of bear territory,” Mangun said.
Jonathan Ravelas, chief strategist at BDO Unibank, said stock market participants were awaiting what the Bangko Sentral ng Pilipinas (BSP) would do at its next monetary policy meeting on Aug. 9.
“The market is anticipating more rate adjustments from the BSP as domestic inflation continues to rise,” Ravelas said.
“Chartwise, the week’s close at 7,399.61 signals further consolidation. The present bounce remains vulnerable toward another attempt below the 7,000 levels,” he said.
Ravelas sees the PSEi’s immediate support and resistance levels at 7,000 and 7,500, respectively.
Meanwhile, thin trading at the stock market remained a concern.
Last week, the total value turnover of P19.23 billion marked the lowest value traded in a full week since February 2016, Mangun noted.
Net foreign selling last week summed up to P1.58 billion.
