Philippine share prices are likely to remain vulnerable to the ebb and flow of foreign funds and even another roller coaster ride this week, with the Organization of Petroleum Exporting Countries (OPEC) about to make a much awaited decision on production cuts while the US economy gains more traction on the road to recovery.
Most local investors are expected to stay sidelined in the absence of domestic catalysts, and with the market closed for a national holiday on Wednesday, Nov. 30.
“For next week, we expect the PSEi to track international markets again as global investors position ahead of the OPEC meeting on the 30th and the December FOMC [Federal Open Market Committee] meeting,” BPI Asset Management said in a note over the weekend.
It expects the benchmark PSEi to trade within a 400-point range from 6,700 to 7,100.
Investors are putting their bets on hold until the pressing issue of interest rates in the world’s largest economy is finally settled, said Ralph Christian Bodollo, equity analyst at RCBC Securities Inc. “We expect investors to remain on wait-and-see mode next week amid the lack of catalysts and caution ahead of the US Fed policy meeting on December 13 to 14.”
Online brokerage 2TradeAsia.com noted the markets may encounter selling pressure as the peso trades on a weak note against the US dollar.
On Thursday, the Philippine peso sank to a 10-year intraday low of P50:$1 before closing at a fresh 8-year low of P49.98, mainly due to persistent fears of a Fed rate hike by December.
“With only four trading sessions this week, downside pressures might still be seen and could take its queue from the peso-dollar trend,” 2TradeAsia.com said. However, investors should “stay alert for accumulation on lows.”
On Friday, the PSEi rose by 0.24 percent or 16.47 points at 6,889.78, while the wider All Shares firmed up by 0.14 percent or 5.90 points at 4,176.54.