Stocks may trade on the soft side this week as investors cautiously await election developments and the results of a key oil producers’ meeting in Doha and US data, due out during the week.
Albee Lu, equity research analyst at BA Securities Inc., in a phone interview, said that for the week, the benchmark Philippine Stock Exchange Index (PSEi) is seen trading flat to downward.
“It is about time to have a correction at this point,” Lu said, adding that the 7,400-point level was too high, especially ahead of the forthcoming national elections.
Last week, the PSEi added 74 points or 1.02 percent to close at 7,321.
The moderate gain was propelled by services firms advancing 3.02 percent, followed by holding firms with a 1.4-percent increase.
Average value turn over shot up by 23 percent to P6.7 billion, with foreign investors net sellers for the week at P253 million. Advancing shares were ahead of decliners, 102 to 92.
Lu explained that the national elections are playing a bigger part in the movement of the index, as more and more people are looking forward to them.
“The national elections are also a factor why the index is moving flat to downward. A lot of people are looking forward to the elections. Thus, the trading range before elections is seen to be from 7,100 to 7,400,” she said.
Meanwhile, AB Capital Securities Inc., in its report said that coming into the week, analysts and investors will be tracking global events such as Doha Oil Summit (Sunday in Manila) as well as the European Central Bank press conference on Thursday.
“The result of key US data will also be monitored, such as building permits/housing starts, weekly crude oil inventories, unemployment claims, and the flash manufacturing purchasing managers index,” AB Capital said in its note.