Market to seek direction from SONA

MANILA, Philippines - Market investors will be keeping a close watch on President Duterte’s State of the Nation Address today.

His second SONA is expected to provide leads on his administration’s economic program and updates on his infrastructure program which promised to usher in the so-called golden age of infrastructure.

In a commentary, BDO chief market strategist Jonathan Ravelas said last week’s close at 7,989.73 continues to suggest the market would range between 7,700 and 8,000 levels this week.

“A break above the 8,000 levels will signal further tests toward the 8,150 to 8,200 levels,” he said.

“Last week, the Philippine Stock Exchange index (PSEi) rallied 1.32 percent week-on-week to 7,989.73 after hitting the 8,000 levels twice last week as investors bought ahead on optimism of second quarter 2017 corporate earnings results and President Duterte’s second SONA scheduled today,” Ravelas said.

However, breaching the 8,000 level would be prove to be a major resistance level for the PSEi, according to First Metro Investment Corp. and the University of Asia & The Pacific in the latest Market Call.

“Nonetheless, the index has shown resilience as it continued to bounce back every time it fell below 7,800. Selectivity will remain the key strategy to capture the value of the market until the end of the year. Attractive stocks may still be found in the holdings, banking and power sectors,” Ravelas said.

2TradeAsia.com, for its part, said all eyes would be on President Duterte’s SONA.

‘All eyes will be on President Duterte’s SONA, ahead of government’s economic blueprint aside from his administration’s timeline in lifting the martial law in Mindanao. Details on Duterte’s Tax Reform for Acceleration and Inclusion (TRAIN) as well as the ‘Build Build Build’ program will be among key topics that will be looked forward to, as these are catalysts and are conjoined in companies’ capex rollout plan,” it said.

On the political side, it said that any hint on the possible early lifting of martial law in Mindanao could influence sentiment positively.