PH shares poised for more weakness on fears of global slowdown
The benchmark Philippine Stock Exchange Index (PSEi) is poised for more weakness this week after it failed to stay above the key 8,000 level, Jonathan Ravelas, BDO Unibank Inc. chief strategist, said.
The PSEi closed the week almost unchanged at 7,983.98 as investors focused on “fears of a global slowdown is rising after the trade war between the United States and China escalated to a new level,” Ravelas noted.
“The week’s close at 7,983.98 highlights the market’s inability to stay above the 8,000 levels” he said. “This increases the probability of further decline toward the 7,000-7,300 levels in the near term.”
Ravelas, who previously said investors were looking for more convincing narratives in the domestic scene to sustain a rally above 8,000, said there was a chance the weaker performance would be a “mere correction.” He did not discount the possibility that the PSEi could again retest the 8,000 barrier this week.
Astro Del Castillo, First Grade Finance Inc. managing director, agreed as he noted the PSEi would remain in consolidation.
“This is due to uncertainties overseas and despite the string of good news,” he said, referring to the surge in foreign direct investment commitments in the first quarter and the prospect for further interest rate cuts.
“The No. 1 uncertainty is still overseas,” he said.
Luis Gerardo Limlingan, managing director at Regina Capital Development, said investors were keeping an eye on external developments. Also of interest is the run-up to the 2019 G20 Summit in Osaka at the end of June.
“We’ll be trading sideways [this week] but we are trying to make a push to 8,200 so hopefully no sudden negative shocks that would make us sell down,” Limlingan said.
