Investors are seen to pick up battered stocks this week, days after the bourse hit new lows for the year due to uncertain economic prospects.
Last week, the main-share Philippine Stock Exchange index (PSEi) tumbled by another 1.76 percent to close on Friday at 6,258,71.
“Philippine shares are seen to recover this week on bargain-hunting as the market will be able to price in the first quarter GDP (gross domestic product) contraction and the MSCI rebalancing results,” said Manny Cruz, chief strategist at Papa Securities.
The government is set to report on May 11 the country’s first quarter GDP. The consensus is still a year-on-year economic contraction for the fifth straight quarter, with forecast declines ranging between 1.2 percent and 4.5 percent.
“The local economy likely remained in a contraction in the first quarter, as domestic consumption continued to be weak,” Cruz added.
The next rebalancing of closely-tracked index provider MSCI will also be announced on May 11.
“Investors are now seen to focus on the developments on the COVID-19 numbers that show current downtrend in cases nationwide, primarily in the NCR Plus that might lower the country’s risk classification from high to moderate in the coming weeks, opening the possibility of the reopening of some industries to support the recovery of the economy,” Cruz said. ING Philippines economist Nicholas Mapa said the country’s economic recovery was still shaping up towards a “dirty L,” with the impact of the strict lockdowns taking root in the second quarter.