Slow trading week seen

Muted trading is expected in the local stock market this week as investors assess their year-to-date gains ahead of the Christmas break.

Last week, the main-share Philippine Stock Exchange index added 32.34 points or 0.04 percent to close on Friday at 8,337.04 on general optimism arising from the ratification of the tax reform program.

“Turnover will still likely be low. I would expect the same kind of volatility in the last days of the year,” said Manuel Lisbona, president of PNB Securities.

The index may bounce from last Friday’s drop, said Eagle Equities president Joseph Roxas said.

“But I think the stronger increase will be after Christmas,” Roxas said.

Lisbona said the much-awaited yearend or Santa Claus rally had not happened because the change in accounting rules was making window-dressing activities useless.

BDO chief strategist Jonathan Ravelas said Congress’ passage of the Tax Reform for Acceleration and Inclusion (TRAIN) and the 2018 national budget ahead of the Christmas break boosted investor sentiment last week.

“Investors took it positively and pushed the market higher to 8,461.06 in the early part of the trading week before it succumbed to some profit taking toward the end of the session,” Ravelas said.

Chartwise, Ravelas said the week’s close of 8,337.04 showed that the market still had some gas to try the 8,500 levels.

Immediate support is seen at 8,150 while resistance is seen at the 8,600 level.

After two consecutive years of decline, the PSEi is expected to end this year with double-digit gains. The PSEi has so far gained 1,496.4 points or 21.9 percent.