Economic rebound promise unsettles vulnerable PSEi

The benchmark Philippine Stock Exchange index (PSEi) will continue to trade within a narrow range as investors remain doubtful of economic recovery amid the spiraling number of COVID-19 cases.

Jonathan Ravelas, chief strategist at BDO Unibank Inc., sees the near-term range at 5,700-6,000.

But he cautioned the decline last week pointed to the market’s “vulnerability to sell-offs.”

“Improvement in investor sentiment hinges on earnings and further reope­ning of the economy,” Ravelas said in a note to investors.

This came as the PSEi fell a second time in the last three weeks. As of Friday, the PSEi was down 2 percent to 5,884.18 versus the previous week.

“The confidence in the economy remains pinned down by the steady stream of new COVID-19 cases,” Ravelas noted.

Chris Mangun, research head at stock brokerage firm AAA Equities, said separately the benchmark measure reflected expectations that revenues for the quarter would remain weak.

“Investors are skeptical that we will see a strong economic recovery in the third quarter as mobility remains restricted,” Mangun said.—MIGUEL R. CAMUS INQ