Stocks seen to struggle as poll results awaited

MANILA, Philippines – The Philippine Stock Exchange index (PSEi) may struggle to recover this week but any rebound may be limited to the 7,100 levels as investors continue to await the results of today’s presidential elections.

“Chartwise, the week’s close below the 7,000 levels puts the 6,800 to 6,900 levels  at  play in the week ahead with a bounce, if any, is limited to the 7,100 levels,” said Jonathan Ravelas, chief market strategist of Banco de Oro. 

Last week, the main composite index fell 2.34 percent week-on-week to 6,991.87. It dropped to as low as 6,961.65 during the week.

Aside from the national election jitters, external factors also affected the market, said 2TradeAsia.com.

“Over and above the national election jitters, low incremental gain on US private sector jobs data plus slower first quarter US GDP growth and weak manufacturing trend from China cast despondency in equities, pulling the PSEi 167 points lower at 6,991 or minus 2.34 percent week-on-week,” it said in a market commentary.

All sectors finished in negative territory primed by holdings which declined 3.3 percent and services which went down 2.54 percent.  Participation likewise slipped eight percent to P5.828 billion on average with losers besting winners, 114 to 72.  Net foreign selling was recorded at P156 million.

In the end, however, analysts said investors would continue to be on a wait-and-see stance until the final election tally is released on May 25.

“For now, the investing community will be on a wait-and-see mode to check on the market’s quick acceptance of results, which might still be marred by possible protests from candidates inclined to question the counting process,” 2TradeAsia.com said.

With the uncertainties, the peso is expected to weakened to as low as P47.35 against the dollar from P46.89 last week, it also said.

Investors will also look into the winning candidate’s decisive economic platform. This as the business community has criticized election frontrunner Rodrigo Duterte for failing to outline his economic platform.

Makati Business Club president Ramon del Rosario said Duterte did not present his economic program during a recent meeting with the group.

PSE president Hans Sicat, for his part, said on Saturday that investors would indeed look into the candidates’ economic platform as well as the new economic team.