CORPORATE RESULTS, month-end window dressing and market bets ahead of the US presidential vote could boost Philippine stocks this week.
On Friday, the Philippine Stock Exchange index (PSEi) rose 0.41% or 30.44 points to 7,314.23, while the broad index of all shares rose 0.24% or 9.88 points to 4,017.27.
However, week by week, the PSEi decreased by 1.37% or 101.50 points. from 7,415.73 close on October 18.
“Local equities retreated as Tropical Storm Kristine wreaked havoc, wiping out optimism built up earlier this month,” the online brokerage firm said. 2TradeAsia.com said in the market book.
“The domestic market is struggling to break through the 7,400-7,500 resistance range as the peso weakness and overseas uncertainty dampen sentiment. Therefore, the market is prevented from continuing to run,” said Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco in a Viber message.
On Friday, the peso closed at P58.32 per dollar, down 44 cents from its close of P57.88 on Tuesday, data from the Bankers Association of the Philippines said. This was its weakest close in almost three months or since it ended at P58.333 per dollar on Aug. 1.
Week by week, the local unit decreased by 80.90 centavos from its close of P57.511 on Oct. 18.
This week, Philippine stocks may rise in bargain hunting as prices remain attractive, said Mr. Tantiangco.
“Investors are expected to look forward to the third quarter reports of companies. High business results are seen as one of the factors that may increase the market,” he said.
“The tight monetary policy outlook of the Bangko Sentral ng Pilipinas (BSP) is still expected to provide market support… Investors are expected to monitor local currency movements.”
Mr. Tantiangco placed market support at 7,150.
“There is no other catalyst, [this] The dressing period of the end of the week window may be an opportunity for traders to be able to bet and bet before the US vote, especially given the timing of the implementation of the RRR (reserve requirement ratio) reduction which should continue to include available trading capital,” 2TradeAsia.com said.
2TradeAsia.com put PSEi immediate support at 7,000 and resistance at 7,500.
Effective Friday, the BSP lowered the RRR for international and commercial banks and non-banking financial institutions with banking-like activities by 250 basis points (bps) to 7% from 9.5%.
It also cut the RRR for digital banks by 200 bps to 4%, while the rate for moneylenders was cut by 100 bps to 1%. The reserve requirement for rural and cooperative banks has been reduced by 100 bps to 0%.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort placed immediate support for the PSEi at 7,050-7,260 and resistance at 7,600-7,800. – RMD Ochave
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