In an anemic market, PSEi could slip to 5,700

The benchmark Philippine Stock Exchange Index (PSEi) is expected to consolidate in the coming days and even slip lower as investor sentiments remain “fragile.”

In his weekly outlook, BDO Unibank chief strategist Jonathan Ravelas expects the PSEi to move between the 5,700-6,000 level in the near term.

“This comes after the market failed to stay above the 6,000 level. Expect a retest of the 5,700 levels,” he said.

The PSEi dipped lower by 1.13 percent week-on-week to 5,931.61.

Ravelas cited the slowing rate of inflation in September, which he said signalled a “still weak economy and anemic consumer demand.”

“Investor sentiment remains fragile until we see firmer signs that demand is picking up as the economy further reopens,” he added.

For the coming week, investors will also be focused on the local leg of broadband company Converge ICT Solutions Inc.’s P29-billion initial public offering.

The offer period will run from Oct. 12-16 after the IPO price was set at P16.80 per share or near the bottom of an earlier indicated range.

Chris Mangun, research head at stock brokerage firm AAA Equities, said the price cut pointed to how “delicate the investor appetite is because of the current conditions.”

“This may be a strategy to encourage investors to take up more shares,” Mangun said in a text message.

“We have to remember that the telco sector was one of the most resilient industries despite the economic fallout brought by the pandemic and there is a lot of growth in this sector as companies like Converge, with its advantages, stand up to the telco giants,” he added.