WEEKLY MARKET OUTLOOK

Wait-and-see mode likely in share trading

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The local stock market is likely to move sideways this week as investors look for a catalyst that can drive the market up or down.

Trading is expected to be lackluster and according to Luis Limlingan, the managing director of Regina Capital Development Corp., the Philippine Stock Exchange index (PSEi) will “continue moving sideways this week, within a narrower range of 8,030 to 7,900.”

He said last week’s pessimistic trend will start to shift slowly to the neutral side this week, even though some indicators still remain bearish especially in terms of price momentum.

Online brokerage firm 2TradeAsia.com said that the flat trading sessions expected this week is due to investors being on a “wait-and-see mode within August’s Ghost Month.”


It said investors will try to look at how fast the Duterte administration can carry out its infrastructure spending and economic plans which will influence the state of the economy in the final semester of the year.

But this week, the brokerage firm said the PSEi could fluctuate between 7,850 and 8,030.

According to Jeremy G. Yumul of the RCBC Securities Inc., now that the first half earnings season almost over, next week’s trading would be influenced more likely by significant corporate news or macro news, price movements of crude oil and gold, and the behavior of major global stock markets.”

Depending on the movement of the local stocks in the medium term—one to three months period— Limlingan said it would be beneficial for the market to drop to its 50- to 65-day moving averages or 7,850 to 7,700 levels “because prolonged consolidation near its highs [8,000 levels] increases the risk of volatile corrections should a reversal be triggered.”

On Friday, the PSEi declined by 0.28 percent or 22.06 points to 7,930.75, while the wider All Shares index also fell by 0.21 percent or 10.08 points to 4,697.50.

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