Share prices are expected to resume their sideways movement after last week’s rally, with investors looking for catalysts that could sustain the market’s upward momentum.
With the release of first-quarter corporate earnings report almost over and the much-awaited decision of the Bangko Sentral ng Pilipinas to raise interest rates, analysts said investors were now shifting their focus on the second phase of the tax reform agenda as possible catalyst that could affect the market over the near- to medium-term period.
Package 2 of the Tax Reform for Acceleration and Inclusion of the Duterte administration could include a reduction in the corporate income tax and the modernization of fiscal incentives.
Stock market investors will continue to monitor the inflation and foreign exchange rates and fuel costs, which are factors affecting the earnings results of most companies.
“Challenges will be constantly present in economies gearing up with their fiscal expansion agenda. While the world is cognizant of geopolitical uncertainties, these headlines could work to investors’ advantage,” 2TradeAsia.com said.
The Philippine Stock Exchange Index last week surged 2.73 percent to 7,752.11 points while the broader index climbed 2.26 percent to 4,709.15 as investors cheered the 6.8-percent gross domestic product growth in the first quarter of the year, as well as the move of the Bangko Sentral to raise interest rates by 25 basis points.
Except for the mining and oil index, which declined 1.1 percent, all other sub-indices were in the green, led by property (+4.91 percent), services (+2.3 percent), industrial (+2.2 percent), holding firms (+2.02 percent) and financials (+1.4 percent).
Foreign investors were net sellers during the week by P1.8 billion. Turnover, however, remained thin with average daily value traded at P5.85 billion, down from last week’s average of P6.6 billion.
Weekly top price gainers were Globe Telecom Inc., which rose 18.1 percent to P1,742; SM Prime Holdings Inc., which advanced 10 percent to P35.65; and Metro Pacific Investments Corp., which gained 6.1 percent to P5.41.
Weekly top price losers were Concepcion Industrial Corp., which declined 6.4 percent to P58; Cemex Holdings Philippines Inc., which dropped 5.1 percent to P3.18; and SSI Group Inc., which fell 4.6 percent to P2.28.
Wall Street stocks, meanwhile, finished a strong week on a mostly positive note, with the Dow and S&P 500 rising modestly and the Nasdaq dipping.
The Dow Jones Industrial Average rose 0.4 percent to close the week at 24,831.17, its seventh straight positive finish.
The broad-based S&P 500 advanced 0.2 percent to end at 2,727.72, while the tech-rich Nasdaq Composite Index slipped less than 0.1 percent to 7,402.88.
Analysts said a combination of mostly good corporate earnings and mild inflation had boosted confidence, allowing investors to look past myriad lingering risks on trade, monetary policy and US politics.
Major indices rose more than two percent for the week.
“Good earnings and mild inflation numbers are a great formula for the markets,” said Jack Ablin chief investment officer at Cresset Wealth Advisors. With AFP
