Local stocks still face ‘downside risks’
Philippine stocks continue to face downside risks as inflationary pressures, amplified by the Russia-Ukraine invasion, weigh on investor sentiment.
The benchmark Philippine Stock Exchange Index attempted to rally toward the 7,200 level early in the week before encountering resistance and closing back down below 7,000 on Friday.
Overall, the index was marginally higher by 0.20 percent week-on-week to 6,998.59.
The market was lifted by an International Monetary Fund report upgrading the Philippine growth outlook to 6.5 percent from 6.3 percent in 2022.
The first quarter earnings season was also underway, with early reports from BDO Unibank Inc. and Bank of the Philippine Islands showing strong profit growth so far this year.
Even then, BDO Unibank chief strategist Jonathan Ravelas said risks remained, causing investors to stay risk averse.
“The week’s close at 6,998.59 highlights the market’s inability to sustain gains above the 7,150 levels,” he said in a note to investors. He added that a breakdown below 6,900 might see the index move toward 6,500.
For his part, Regina Capital Development managing director Luis Gerardo Limlingan said earnings would be in focus apart from the typical month-end “window dressing.”
Moreover, investors would be monitoring developments in Ukraine and its impact on commodity prices, he added. —Miguel R. Camus INQ
