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Philippines: Sluggish trades seen as virus scare lingers
MANILA, Philippines — The stock market may sustain its downward trend this week as fears of the novel coronavirus continue to sent jitters across the globe.
BDO Research said risk aversion is contagious and coronavirus has infected investor confidence.
Japhet Louise Tantiangco, senior research analyst at Philstocks Financials, also said that downside risks remain.
“Risks remain tilted to the downside amid the coronavirus and regulatory worries,” he said.
The Philippines has already reported its second case of coronavirus and the patient, a 44-year old male, has died, marking the first confirmed death from the virus outside China.
However, Tantiangco said a glimmer of hope looms as investors await 2019 full year corporate earnings results.
“Still, we see a glimmer of hope on the shares’ attractive valuations together with the anticipation of full year 2019 corporate earnings. If the coronavirus which is already in our country would be contained, if it would not spread further, then we may see the market climb on bargain hunting backed by earnings anticipation,” he said.
The January inflation report could also set the market’s direction.
“We’ll also have the January inflation figures and the BSP’s first policy meeting for the year. However, with a tight labor market and inflation expected to pick up (this January 2020, we forecast 2.8 percent), the BSP may keep policy rates unchanged for the time being. This would be neutral for the market,” Tantiangco said.
In all, he said the PSEi is seen to trade within its 7,150 support line and 7,300 to 7,350 resistance range.
Last week, the benchmark Philippine Stock Exchange index (PSEi) tumbled anew by 5.54 percent week-on-week for the fourth straight week to 7,200.79. The week’s close highlights the move toward the 7,000 levels is underway. Any pullback could be limited towards the 7,700 levels.
Source: https://www.philstar.com/business/2020/02/03/1989865/sluggish-trades-seen-virus-scare-lingers