Trading at the Philippine Stock Exchange is expected to remain volatile in this shortened trading week, as investors attention will be fixed on the US Federal Reserve’s next action on interest rates.
The market will reopen Tuesday, after the government declared Feb. 8 as a holiday in celebration of the Chinese New Year.
Analysts said there was a growing expectation the Federal Reserve would keep interest rate unchanged for the remainder of the year, amid a slowdown in China and the steep decline in oil prices.
F. Yap Securities investment analyst Jason Escartin said a delay in Fed rate hike might bode well for equities in general, while a rate increase in March could lead to more gyrations for the US dollar.
“Upcoming significant data releases include the widely-watched US non-farm payroll data and the unemployment rate. Volatility is still seen for this week’s trading, especially given the uncertainty of central bank actions globally,” BPI Asset Management said in its weekly outlook report.
BDO Unibank Inc. chief investment strategist Jonathan Ravelas said he expected the market to test the 6,800-point level this week on positive investor sentiments.
“A break above 6,800 could test the 7,000 levels. A failure to break 6,800 could prompt some profit-taking and retest the 6,400 levels,” Ravelas said.
The bellwether Philippine Stock Exchange index jumped 1.2 percent last week to close at 6,765.13 on Feb. 5, its second week of gains, as investors sentiments were lifted by recovering oil prices.
Except for the services sub-index which was down 0.01 percent, all other major sub-indices ended in the green led by mining and oil (9.2 percent), industrial (2.1 percent), financials (2 percent), property (1.7 percent) and holding companies (1.1 percent).
Foreign investors were net buyers last week by P523.4 million, as total foreign buying reached P19.51 billion while overseas selling amounted to P18.99 billion.
Notable gainers last week week were mining stocks Nickel Asia Corp. (up 23.2 percent) and Philex Mining Corp. (up 19.2 percent) as well as property developer Vista Land & Lifescapes Inc. ( up 13.6 percent).
Heavy losers included appliance maker Concepcion Industrial Corp., which went down by 6.3 percent, after reporting a lower-than-expected net income in 2015, while Lopez-owned Energy Development Corp. lost 4.6 percent.