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Friday, March 29, 2024

Market likely to trade sideways

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Stocks are expected to move sideways this week ahead of the Monetary Board meeting on Thursday, analysts said over the weekend.

BDO Unibank Inc. chief investment strategist Jonathan Ravelas said the recent macroeconomic developments could make the Monetary Board hold off another interest rate increase.  The board is the policy-making body of the Bangko Sentral ng Pilipinas.

“The continued slowdown in the economy in third quarter of 2018 and signs inflation may soon peak, along with the recovering peso and retreat in oil prices, builds a strong case for the Bangko Sentral ng Pilipinas to pause in its tightening cycle for the rest of the year,” Ravelas said.

Philstocks research head Justino Calaycay said the benchmark index should be able to hit 7,270 points over the near-term to end the year on a strong note toward the 7,880 level.

“This conviction should manifest in stronger value flows,” Calaycay said.

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The Philippine Stock Exchange index, the 30-company bellwether, declined 2.4 percent last week to close at 6,968.82 on Nov. 9, while the broader all-share index also dropped 2.3 percent to 4,269.88.

The gross domestic product grew 6.1 percent year-on-year in third quarter, slower than 6.2 percent in the second quarter.

All counters ended in the red led by services which declined 5.4 percent, followed by mining and oil which went down 4.7 percent. The property index shed 3 percent while financials, holding firms and industrial posted declines of 2.2 percent, 1.28 percent, and 0.67 percent, respectively.

Foreign investors were net buyers last week by P30.77 billion, thanks to the recently completed share sale of San Miguel Food and Beverage Inc.

Top gainers last week were  ISM Communications Corp. and Chelsea Logistics Holdings Corp., after the group of Davao-based businessman Dennis Uy was named the provisional winner for third telecom operator in the country.

Share price of ISM, a company led by Uy, jumped 112.5 percent to P6.80, while that of CLC advanced 24.6 percent to P7.80.

Heavy losers included Globe Telecom Inc. which fell 17.3 percent to P1,728 and PLDT Inc. which dipped 12.2 percent to P1,220.

The PSEi was down 18.6 percent since the start of the year, making the Philippine stock market one of the weakest performers in the region.  Economists linked this to the depreciation of the peso which shed more than 6 percent this year, as investors trooped back to the US market.

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