Philippine shares could receive a boost this week from year-end window-dressing, analysts said, with the market having gotten past the US interest rate hike bugbear.
“Bets for 2016 may have been well put in place, with last-minute window-dressing boosting year-to-date winners,” said Jason Escartin, investment analyst at 2TradeAsia.com.
Approaching the yearend, however, some bearishness could occur, Escartin added.
“An overwhelming number of stocks are trading below their 200-day volume weighted moving averages, suggesting underlying sentiment may be bearish going into the New Year,” he said.
“Net foreign selling in this month so far has reached P6.13 billion with year to date net selling at P59.1 billion, compared to net buying of P55.45 billion in the whole of 2014,” Escartin noted.
Jason Bibit of Regina Capital Development Corp. echoed the sentiment, saying that market trading for this week and the rest of the year will be equities-focused.
“For equities, I believe markets everywhere will focus more on earnings now than liquidity,” Bibit said.
Last Thursday, the US Federal Reserve finally announced its first interest rate hike in nearly a decade, ending months of speculation that had roiled markets worldwide.
With the Fed setting the stage for gradual increases moving forward, Escartin said this would mean a further appreciation of the dollar, which would translate to an “increasing debt burden on firms with debt denominated in the greenback plus downward pressure on issues with dollar-denominated input costs.”
“[Investors should] check on local firms’ exposure to the currency to guide trades. Firms with minimal negative exposure to the Fed’s rate hike may even be favored,” he said.
On Friday, the Philippine Stock Exchange index (PSEi) declined by 0.56 percent or 38.63 points to 6,867.07, while the broader All Shares index also dropped by 0.59 percent or 23.44 points to 3,940.88.