The country’s gross domestic product (GDP) numbers in the first quarter that is going to be released later this week is expected to set the mood of the investors toward the local stock market starting today.
Jun Calaycay, Accord Capital Equities Corp. analyst, said that the release of first-quarter GDP numbers later in the week will give reason for investors to make bets on the market’s heading.
He also indicated that given the forecast of some international agencies, GDP numbers for this quarter may not go behind expectations.
“Not a few international agencies, including but not limited to the World Bank, International Monetary Fund, Standard and Poor’s, Moody’s and the Asian Development Bank, have projected the Philippines to grow at no less than the lower limit of the government’s 6-percent to 7-percent band,” Calaycay said.
He also said that those who have been waiting for a correction may find a bit of satisfaction on the corrections that occurred last week, pointing out that a good number of index heavyweights got beat over that period and this may have made their prices more inviting.
For her part, Freya Natividad, analyst at online brokerage 2TradeAsia.com, said that with the legislative line-up at the Senate almost in place, fiscal support measures will be scrutinized by market watchers, over and above initiatives to raise taxes.
“This will cover multipliers related to employment, especially for industries that are generally considered labor-intensive. Highlights will cover support to sustain the flow of investments toward low-cost housing, tourism, mining and mineral exploration, among others,” she specified.
“For now, debates are anticipated to flux on proposals to scrap tax incentives from the 2013 Investment Priorities Plan, especially on the extent of its effect to individual firms and members of the supply chain,” she added.
Overseas, Natividad noted that macro incentives are still in place, as general consensus grows in favor of monetary stimulus plans, given the “budding” improvement in economic indicators for large economies like the United States and Europe.
“While overseas leads might highlight sentiment for now, the PSEi [Philippine Stock Exchange index] might consolidate short term, possibly within 7,200 to 7,300,” she further said.
Calaycay also said that for this week, chartists may keep an eye on the gap between 7,070 and 7,185, that opened when the market jumped to its 28th record close at the beginning of the month.
“We had pointed out this gap in the immediate following day it opened. Immediate support line of the PSEi is at 7,200 to 7,215 with the major line drawn at 6,990. Resistance is pegged at the record highs, 7,390 to 7,400,” he said.
In the previous week, the PSEi ended 11 points lower at 7,268.91, or a 0.15-percent decline week-on-week. Participation also slowed 16 percent to P8.646 billion on average, with losers overpowering gainers, 99-64.