WEEKLY SHARES OUTLOOK

Firmer ahead of Trump inauguration

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LOCAL stocks are expected to trade mostly firmer this week as investors track developments ahead of the inauguration of US President-elect Donald Trump.

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“We could see investors position themselves ahead of developments in the US such as the inauguration of President-elect Trump and the release of more corporate earnings results,” Jeremy Yumul of RCBC Securities said.

On the other hand, online brokerage firm 2TradeAsia.com sees a “volatile ride” for local equities this week despite “renewed optimism” amid selling pressure on selective stocks that made sharp ascents last week.

“The market might go through another volatile ride this week, with sentiment largely anchored abroad,” 2TradeAsia.com said.

“Eyes are set on the inauguration of US President-elect Donald Trump on January 20, 11 A.M. (ET), and players are aiming to hear clearer highlights how the new administration will help support fiscal spending and tax reforms. Any hint on these angles could provide the boost, and reinforce expectations of sequels to last year’s ‘Trump rally’,” it added.

There were quite a few dips on the Philippine Stock Exchange (PSE) index last week, influenced by Trump’s mention of protectionist measures in his last news conference.

“Furthermore, with expectations that the US economy will be driven mostly by expansionary fiscal policies moving forward, investors are expected to take [their]cue from any significant move from government and shift focus from the Fed’s contractionary monetary policy,” 2TradeAsia.com said.

But some infrastructure-related stocks may get a boost from the first visit of Japanese Prime Minister Shinzo Abe to the country, during which P434-billion worth of aid package for five years was announced as well as five agreements on trade, infrastructure and low carbon growth partnership, the online brokerage firm said.

“This latest partnership could help expand similar deals and lead to multipliers to support economic growth. Infra-related stocks could experience renewed boost from this latest partnership and could add to these stocks’ positive outlook in the near term,” it added.

On Friday, the PSEi dipped 0.36 percent or 26.03 points to 7,238.52 while the All Shares index slipped 0.44 percent or 19.15 points to 4,360.83.

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