Market seen consolidating

Local stocks are seen to consolidate this last week of the Lunar “ghost month” while jitters on the US-China trade war and the crackdown on Philippine offshore gaming operators (Pogos) remain on the horizon.

Last week, the Philippine Stock Exchange index (PSEi) added 1.2 percent to close on Friday at 7,889.41, firming up for the first time in four weeks.

Yesterday, there was no stock market trading due to a national holiday in observance of National Heroes’ Day.

The gain last week seemed to have been driven by some bargain-hunting activities, BDO Unibank chief strategist Jonathan Ravelas said.

“The week’s close at 7,889.41 continues to signal the market to consolidate within the 7,700 to 8,000 levels in the near term,” Ravelas said.

“However, downside risk remains toward the 7,500 levels. If said levels are broken, we could see a retest of the 7,000 to 7,300 levels,” he added.

On Friday, US president Trump announced a hike in tariffs to 30 percent from 25 percent on some $250 billion worth of imports from China by Oct. 1. The 10-percent planned tariff on another $300 billion worth of Chinese goods will also be taxed at a higher rate of 15 percent starting Sept. 1.

Meanwhile, China’s call for the Philippines to shut down Pogos continues to cast uncertainty on the property sector. Being the main market and source of manpower for Pogos, China has taken a strong stance against Pogos, which have perked up the local office and residential property sector in the last three years.

“But I think it will be a slow shutdown. They will go after illegal operators first and then maybe not renew the legitimate ones after their license expires,” said Joseph Roxas, president of local stock brokerage Eagle Equities.