Shares outlook for the week: Disappointing data seen spurring further declines
The stock market will likely keep trading lower as investors continue to digest last week’s growth and inflation surprises and the latest Bangko Sentral ng Pilipinas (BSP) rate hike.
The benchmark Philippine Stock Exchange index (PSEi) is still up by 1.7 percent for the month, Eagle Equities,
Inc. research head Christopher John Mangun noted, pointing to a sell-off over a second-quarter economic slowdown, yet another five-year inflation high and a 50-basis point policy rate hike that was the highest in 10 years.
“There is strong indication that we will be seeing a pullback … 7,820 has proven to be strong resistance and despite the higher trading volume, the index could not break through,” he said.
“Investors will be factoring in the disappointing economic numbers that came in last week that exceeded most analysts’ expectations,” he added.
The 50-bps rate hike, prompted by 5.7-percent inflation for July, came despite the economy having slowed to 6.0 percent in the second quarter from 6.6 percent three months earlier.
On the upside, Mangun said investors should see market declines as an opportunity to shop.
“There are still a lot of opportunities out there. We have been very bullish on the property sector since the beginning of the year and we expect it to continue to perform well. We also favor the conglomerates that were laggards last year as investors have found it easier to make money from them as compared to their peers,” he said.
Brokerage firm 2tradeasia.com for its part, advised investors to watch out for opportunities and hunt for undervalued stocks.
“Contrarians in a ghost month believe in opportunities on lulls or in dips. There have been discussions on [the]probability for weakness, but it pays to be alert too when opportunities arise than chase the boat later on,” it said.
The benchmark Philippine Stock Exchange index (PSEi) dropped 0.20 percent or 15.73 points to close at 7,804.98 on Friday, while the wider All Shares dipped 0.02 percent or 113 points to finish at 4,714.69.
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