‘Pullback scenario more favorable for our market’
Credit to Author: The Manila Times| Date: Sun, 13 Jan 2019 16:42:05 +0000
THE stock market could go either way this week following Friday’s plunge, analysts said, with investors expected to be on the lookout for news about a massive loan default that has hit bank shares and overseas developments.
“A pullback scenario is more favorable for our market right now as we don’t want to see it go ‘too far, too fast’ and it also gives more investors the chance to get in at lower prices,” Eagle Equities, Inc. research head Christopher Mangun said in a statement.
“Whichever way it goes … we are still extremely bullish on this market,” he added.
The benchmark Philippine Stock Exchange index (PSEi) dropped 1.02 percent or 81.14 points to 7,904.09 on Friday, weighed down by news that Subic-based shipbuilder Hanjin Heavy Industries and Construction Philippines would be unable to pay over $400 million owed to five of the country’s biggest banks.
The wider All Shares also dropped by 0.73 percent or 34.76 points to finish at 4,730.15.
Four of the five affected banks — BDO Unibank Inc., Rizal Commercial Banking Corp. (RCBC), Metropolitan Bank & Trust Co. (Metrobank), and Bank of the Philippine Islands (BPI) — are listed. The fifth, state-owned Land Bank of the Philippines, is not.
RCBC fell by 9.12 percent or P2.65 to close at P26.40 on Friday. BPI lost 4.76 percent or P4.50 to P90 per share, Metrobank fell 4.82 percent or P3.95 to P77.95 and BDO fell to as low as P127.80 during intraday trading but closed flat at P131.
The financials sector subsequently plunged by 2.54 percent.
Friday’s plunged bucked a regional rally. Elsewhere in Asia, investors continued to ride on optimism generated by fresh US-China trade talks and news that the US central bank would likely slow the pace of interest rate hikes.
US and European markets, however, slipped.
In an interview on Sunday, Timson Securities Inc. trader Jervin de Celis said that among the data investors are expected to watch out for include China’s fourth-quarter growth.
Official figures are scheduled to be released next week.
“If estimates are correct, I think it may renew fears among investors about the slowing Chinese economy and it might cause our index to retest the 7,700 to 7,800 range,” de Celis said.
Other developments that could influence markets this week include a Brexit vote and fourth-quarter results from major US firms.
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