Post-Fed, markets turn to BSP, Trump policies


THE market appears headed for an upswing this week as investors shift focus toward the political and economic policies of the Trump administration, as well as the Bangko Sentral ng Pilipinas (BSP) policy meeting this week.

Luis Limlingan, managing director of Regina Capital Development Corp., said there is a high possibility trading will be upbeat and “will try to establish firm support at 7,300” as seen from the positive investor reaction to the US Federal Reserve move to raise rates last week.

The Fed hiked interest rates by 25 basis points (bps) last week, the second increase after the 25 bps in December last year.

This week, investors will watch closely the result of the BSP meeting on local interest rates, he said.

“Friday’s close gave the market some possibility that the index will try to establish a firm support at 7,300, and if this will happen, then we can see the market trading within a new range between 7,300 to 7,450.

“With several central banks giving their guidance last week, especially the Fed, attention will also focus on our own BSP when they convene later in the week on March 23,” he added.

Online brokerage 2TradeAsia.com said indications of more rate increases by the Fed throughout the year provided investors with relief and prompted buying pressure to materialize on Friday.

Moving forward, not only the BSP meeting but also Trump’s moves will be looked at by nations due to his protectionist nature.

2TradeAsia is pushing a more fearless forecast of the PSEi climbing “past 7,500 and towards 7,600” as the Fed has eliminated the long standing uncertainty on rates that has been hanging over markets since the start of the year.

“Since the Fed’s meeting, the Philippine peso has appreciated by about 0.3 percent against the US dollar, giving BSP more room to adjust rates later than sooner. The other variable would rest on how capital flows will respond, as higher external rates would create increased volatility,” 2TradeAsia said.

“Having breached an intra-week high of 7,417 on Friday, attention is set on the PSEi’s ability to climb past 7,500 towards 7,600. With hurdles still present, it would be best to continue trading a range, until stronger macro catalysts are announced. Immediate support is 7,270-7,300, resistance is 7,450 to 7,500,” it added.

On Friday, the bellwether PSEi rose by 0.91 percent or 66.42 points to 7,345.02, while the wider All Shares gained 0.71 percent or 31.12 points to 4,417.20.


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