Likely more of last week’s sell-off


    Philippine shares are likely to give a bearish performance this week on the heels of the plunge in overseas markets, with investors preferring the sidelines even if prices hit bargain levels.

    Astro Romulo del Castillo, president and managing director of First Grade Finance Inc., said in a phone interview with The Manila Times on Sunday that there could be a replay of last week’s sell-off.

    “There are external concerns that we cannot discount. So for the week we are likely to perform just the same as in the previous [week],” del Castillo said.

    Share prices plunged during the first trading week of the year as panic over a slowing China economy coupled with geopolitical concerns in the Middle East sparked a global sell-off.

    On Friday, the benchmark PSEi shed 43.45 points or 0.66 percent to close the week at 6, 575.43, with a turnover value of P5.5 billion. On Thursday, the market tumbled nearly 3 percent in nervous trading.

    Del Castillo noted the trading range this week could be between 6,300 and 6,380 on the PSEi.

    “Nonetheless, we are still optimistic that the equity market is still a good investment for the entire year. Investors staying on the sideline would more likely hunt for bargains in the coming weeks,” he said.

    Jason Escartin, investment analyst at 2TradeAsia.com, views the market along those lines as well.

    “With local gauges at its critical juncture at 6,500 points, we expect participants to have their fingers on the trigger, ready to seize opportunities to score bargains,” he said.

    Escartin sees a lot of traders in the “selling mode,” noting the likelihood of buying opportunities for bargains.

    Anton Alfonso, analyst at RCBC Securities, on the other hand, remains skeptical.

    “With a lack of catalysts to support buying on the local front, value turnover may likely remain muted as investors may continue to trade with a cautious eye towards developments in China.”


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