Poll jitters, bearish global market to keep PSEi weak

CEBU, Philippines - Volatility in the Philippine stock market may increase after the elections and will remain weak in a long-term perspective.

Marco Nino Velasco, business development manager at Unicapital Securities Inc., said the market in general "is not really doing well".

 "Last Friday, it was very weak mainly because of some global and election jitters plus the three non-trading days," Velasco told The FREEMAN.

 There was no trading yesterday, which was declared a special non-working holiday nationwide as the country held the national and local elections.

 "Markets normally drop during long weekends because of fears that bad news may come out any time while the market is closed," Velasco said. "Looking on the bigger picture, it doesn't really look good either."

 He pointed out markets all over the world are bearish as same global economic issues persist which include the slowdown in the Chinese economy, low oil prices and Japan's flagging economy, among others.

 "The slowdown of China's economy played a big part in the slowdown of the global economy, which is severely affecting the Philippines and the PSE (Philippine Stock Exchange) right now," Velasco said.

 He explained that the election has a very minimal impact on the market's performance, saying it will be short-lived.

 "Regardless of who wins, market will drop because of global market sentiment," he said.

 "The PSE has been slipping for a year already — from a high of 8,000 to 6,990 recently — and it's all because o the global economy," he added. 

 The PSE index shed 167.42 points or 2.34 percent to close at 6,991.87 last Friday.

 Trading resumes today and PSEi is expected to trade between 6,900 and 7,000 but the index dropping to 6,600 is not a far possibility, he said.

 Velasco further said that political instability brought by the recent elections may add more woes to the market and add more weight to bring it down. (FREEMAN)