Share prices are expected to bounce back this week as bargain hunting and hopes of a rate cut could counter the previous week’s steep decline.
The benchmark Philippine Stock Exchange index (PSEi) last week plunged by 3.79 percent to close at 6,027 while the broader all shares index declined by 2.57 percent to 3,644.
Unicapital Inc. research analyst Peter Garnace said this week’s rebound will also be supported by improved sentiments from the U.S.
“The market will digest U.S. core PCE (personal consumption expenditure) for August, which came in line with the market estimates, increasing hopes for two more rate cuts from the U.S. Fed’s upcoming meetings,” Garnace said.
“This could ease pressure on the peso and give Bangko Sentral ng Pilipinas (BSP) greater scope to continue its easing cycle,” he added.
Meanwhile, investors are also expected to watch out for key economic data such as the country’s trade balance and U.S. jobs data.
Last week’s decline was largely due to negative investor sentiment following the latest developments in the government’s investigation into the corruption in flood control projects.
The weak peso also contributed to the market’s overall decline.
Year-to-date, the PSEi is down 7.68 percent.
Average value traded for the week reached P9 billion, slightly higher than the previous week’s average of P8.7 billion.
Despite the market’s decline, foreign investors turned net buyers with inflows amounting to P6.36 billion.
