Profit-taking seen ahead of ‘highest’ trade deficit
Credit to Author: ANGELICA BALLESTEROS, TMT| Date: Sun, 06 Jan 2019 16:17:21 +0000
INVESTORS are likely to take profits this week after the Philippine Stock Exchange index (PSEi) touched the 7,800 level and on expectations of the highest trade deficit data, according to analysts.
In a market comment over the weekend, Eagle Equities Inc. research head Christopher Mangun said he expected market players to cash in on gains and take positions ahead of the “largest trade deficit” figure, to be announced this week, supported by slowed exports and increased imports of capital goods and raw materials for the Duterte administration’s “Build, Build, Build” infrastructure program.
“However, there is some talks that as trade tensions mount between the United States and China, some manufacturing firms may see opportunities here in the Philippines and choose to relocate here,” Mangun said.
In a separate comment, online brokerage firm 2tradeasia.com said market players might take caution following the PSEi’s surge last week.
“Given the challenges of tighter monetary framework for 2019 to achieve price stability, much of the global economies’ growth will depend on fiscal initiatives [to] be undertaken,” 2tradeasia.com said.
“As such, investors should be cognizant that infrastructure layout would entail bloating the fiscal gap at the start, but should reinforce future sources of revenues in the long haul,” it added.
The brokerage company also said focus would be back on consumer and investment spending for the first quarter, which would help provide a clearer view of how industries would fine-tune plans for the rest of the year.
It advised investors to pick sectors that are likely to win direct investments’ favor for the year, such as infrastructure-related companies, energy, property and consumer-driven stocks.
On Friday, the PSEi rose by 1.05 percent or 80.51 points to close at 7,761.11. The wider All Shares increased by 0.92 percent or 42.31 points to finish at 4,652.59.
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