MANILA, Philippines — Global economic slowdown and rising tensions are dragging down the Philippine stock market, according to the latest issue of the Market Call.
A joint report by First Metro Investment Corp. and the University of Asia and the Pacific, the Market Call said the local bourse has been affected by negative sentiment triggered by concerns of a global economic meltdown.
“Global equities suffered a bloodbath as investors sought other safe havens due to a plethora of negative vibes in the air. These included deepening global slowdown, US Treasury’s yield curve inverting further in August, US Fed Chair Powell dampening hopes for another rate cut; Germany’s negative second quarter growth and China’s weakest economic growth in over a decade.
“However, these didn’t result in double-digit declines as China tapered down trade fears with its statements to negotiate rather than retaliate against the US,” Market Call said.
Trade tensions, weak second quarter economic growth and increasing jobless claims in the US were causing jitters among investors.
“Meanwhile, the Philippine Stock Exchange index was also volatile in the previous month after the Philippines’ 0.03 percent down weigh from the August MSCI rebalancing, lower-than-expected Philippine second quarter economic expansion and negative sentiments over China’s plans to ban online gambling in the country,” the Market Call said.
The local market earlier failed to overcome headwinds arising from global uncertainties and Chinese embassy’s call for the Philippines to ban offshore gaming operators.
FMIC sees the PSEi trading in a narrow range of 7,750 to 8,050 until more positive economic and corporate developments emerge.
“Corporate earnings should fall mostly in line with expectations, but the pullout threat of POGO could dampen market sentiment,” Market Call said.