Investors hunting for cheap stocks may yet save the bourse this week after it plunged to a nearly two-month low following Donald Trump’s White House comeback and a less-than-stellar local economic growth.
Japhet Tantiangco, research head at Philstocks Financial Inc., warned, however, that any recovery at the Philippine Stock Exchange Index (PSEi) would not be strong.
Protectionist policies
“A strong ascent is not expected yet, however, as investors may continue to deal with our slow third quarter economic growth, weak peso and the challenging global economic outlook due to the possibility of protectionist policies in the US amid a Trump presidency,” Tantiangco noted.
The PSEi dipped further by 2.04 percent to close last week at 6,997.18, surrendering the 7,000-level that it tried to keep for nearly two months. This also means it is now down 7.38 percent from its recent peak of 7,554.68 on Oct. 7.
Record low
Over the past month, the market has been moving between the 7,100 and 7,400 range before eventually slipping once it became clear Republican candidate Trump won the high-stakes US presidential elections.
As a result, the peso likewise slipped to the 58 level against the greenback, nearing the record-low 59.
On a more positive note, Tantiangco said stronger corporate earnings results and the possibility of monetary policy easing in the Philippines may give the market a boost.
Some of the country’s largest conglomerates—SM Investments Corp., Ayala Corp. and San Miguel Corp.—have yet to report their nine-month earnings.
He said the PSEi may retest the 7,000 level this week, while immediate resistance would be at 7,100 to 7,150.
If it fails to move past that barrier, the PSEi may find support at the 6,700 to 6,800 levels.