Trading at the Philippine Stock Exchange is expected to remain sideways this week, with investors quick to take profits after the market gains last week.
Analysts said foreign selling and elevated valuations were giving investors an excuse to cash in on gains to secure their profits.
With the ratification of the much anticipated tax reform bill by Congress, analysts said investors were looking for other catalysts that could push the market higher.
Investors will likely to monitor companies affected by the tax reform agenda of the government and their adjustments to maintain demand for their products.
“The local market cheered the approval of the Tax Reform and Acceleration Inclusions scheme and all is set for the demand side. While the structure entails pass-on costs, it would be up to the consumers to adjust their spending practices based on the merit of the approved increase,” 2TradeAsia.com said.
“With bulk of the pricing for these items indexed to global pricing, it would now depend on listed firms’ heeding strategies to ensure margins are maintained and disruptions to demand are minimized,” it added.
The PSEi last week gained 0.4 percent to 8,337.04 from the previous week’s close, while the broader All Shares Index inched up 0.2 percent to 4,870.43 on mixed trading.
The sub-indices also ended mixed with financials, industrial and holding firms posting week-on-week gains, while mining and oil, property and services registered week-on-week declines.
Foreign investors were net sellers by P376 million, while average daily traded stood at P7.4 billion.
Weekly top price gainers were Belle Corp., which advanced 8. percent to P3.98; GT Capital Holdings Inc., which climbed 8.2 percent to P1,271; and Cemex Holdings Philippines Inc., which rose 8.1 percent to P4.93.
Weekly top price losers, meanwhile, were Semirara Mining and Power Corp., which declined 5 percent to P35.10; Aboitiz Equity Ventures Inc., which dropped 4.8 percent to P67.50; and Atlas Consolidated Mining and Development Corp., which dipped lost 4.7 percent to P4.43.
US stocks, meanwhile, shot to new highs over the weekend on speculation that the Senate was close to an agreement on a tax overhaul package after fence-sitting Senator Marco Rubio reportedly said he’d support the plan. The dollar gained as investors assessed messages from the Federal Reserve and European Central Bank meetings this week.
All major equity gauges were higher, with S&P 500 Index, Dow Jones Industrial Average Nasdaq 100 Stock Index and Nasdaq Composite Index all leaping to fresh records. The small-cap Russell 2000 Index, whose domestically focused members stand to benefit most from tax cuts, added more than 1.5 percent. Equities slumped Thursday when Rubio indicated he wouldn’t support the bill in its current form.
Uncertainty surrounding the fate of US tax reform has had investors on edge as they look to the end of a stellar year for equities. Money managers have shown signs of dialing back their appetite to take risk amid signals that the eight-year stock rally may not be far from its end. With Bloomberg