Philippines: Market to take cues from pandemic

• Apr 20, 2020

As with the past trading weeks, the local bourse will maintain its volatility and will still heavily be influenced by the coronavirus disease 2019 (Covid-19) pandemic.

“[Friday]’s trading has given us a glimmer of hope. But whether this will be sustained next week depends on the further developments of the Covid-19 narrative,” Philstocks research associate Japhet Tantiangco said.

The benchmark Philippine Stock Exchange Index (PSEi) rebounded last Friday to end the week up by 264.37 points or 4.78 percent to 5,789.97.

Tantiangco added the economic damage from the pandemic could already be observed, citing China’s 6.8-percent decline of its domestic product in the first quarter gross of this year.

“We’ll need to see developments like the ones we saw [on Friday] to boost market sentiment, primarily potential treatments that would give us a fighting chance against virus. The pace of the rise in the number of recoveries in the Philippines, if sustained, could also provide support to the market,” he said.

The market rallied on Friday on the back of central bank’s new 50-basis points cut on the interest rate, which puts overnight borrowing, deposit and lending rates at 2.75 percent, 2.25 percent and 3.25 percent, respectively.

Should there be positive developments next week, Tantiangco said the trading range might be from 5,700 to 6,100, while it could fall back to the 5,300- to 5,700-range.

Regina Capital Development Corp. head of sales Luis Limlingan concurred, saying the “market will take its cues from pandemic development. Some earnings will be released and will get an estimate of the damage caused by the virus.”

Likewise, Philstocks research associate Piper Chaucer Tan noted investors would be keeping an eye for developments on the cure for the virus, as well as the schedule of the reopening of cities in the Philippines and the United States.

“As this news unfolds, it may give cues on how the market will perform [and] more importantly, how investors will react. I’ll be placing my trading range for next week at around 5,470 as initial support and 6,000 [the] resistance,” Tan explained.

Source: https://www.manilatimes.net/2020/04/20/business/business-top/market-to-take-cues-from-pandemic/716124/