WEEKLY SHARES OUTLOOK

Subdued trading as Christmas nears

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Trading on the Philippine Stock Exchange is expected to move sideways in the absence of catalysts following the aftermath of last week’s much awaited decision by the US Federal Reserve to raise its key interest rates.

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The bellwether PSEi dwelled in the clutches of a downtrend in the run up to the Fed action and penciled in a 25-basis-point interest rate hike. But the more telling blow on financial markets was the hint of perhaps more rate hikes next year flagging the likelihood of further jitters among investors.

Ralph Christian Bodollo, equity analyst at RCBC Securities Inc., noted the market is moving into the homestretch of 2016.

“We are now down to the last two trading weeks of the year, with the PSEi 1.5 percent lower year-to-date. With no significant event next week, the bourse may just trade sideways on subdued volume going into the Christmas holiday,” Bodollo said.

Online brokerage 2TradeAsia.com sees some buying pressure as fund managers calibrate their portfolio in preparation for 2017.

“The prospect for growth remains supported in 2017, which could warrant some fund managers to start re-positioning on lows. There are first quarter 2017 gifts market players could still hope for, specifically the prospects for reduced income taxes and continued thrust to support infra-related spending,” 2TradeAsia.com said.

“Expect subdued movements this week, as participation might start to moderate as the Christmas holiday approaches. For now, it would be prudent to steer clear from issues that have significant potential foreign exchange loss exposure and stick to defensive, dividend-yield plays,” it added.

On Friday, the benchmark PSEi was down 0.07 percent or 4.60 points at 6,850.71, while the All Shares dipped by 0.05 percent or 1.93 points to 4,159.42.

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