Market may bounce back this week
Iris Gonzales (The Philippine Star) - November 18, 2019 - 12:00am

MANILA, Philippines — The stock exchange index may bounce back this week and may try to target the 8,000 mark following all the losses last week.

“The PSEi was able to end slightly above the 7,920 support level which gives us some optimism. We may see it bounce from this level and try to target 8,000 in the short-term. However, if we have a situation like last week – low trading volumes and massive foreign outflows, the main index will continue lower and test the next support at 7,800,” said Chris Mangun of AAA Securities. 

He said companies have already submitted third quarter earnings which have been better than expected and in line with improving economic fundamentals as several large cap companies posted double-digit growth.

However, Mangun said that investors continue to ignore fundamentals and focus on the sentiment. 

“So far, 2019 has been boring and uneventful as the market has traded sideways within a tight range as investors figure out if the rally that we have seen for the last 10 years has more to go,” Mangun said.

This even as Fitch solutions has upgraded its 2019 growth forecast for the Philippines on the back of improving fundamentals.

Moving forward, Mangun said 2020 is expected to be a big year for the market.

“We see a big move coming in the next few months, the question is, whether that is going to be a move to the upside or massive move lower. With consistent economic growth and supportive government policy, we see the market going higher,” he said.

Last week, the main index inched lower on very thin trading volumes ending a five-week streak of consecutive gains. 

“It struggled to hold support at 7,920, trading below it several times this week. Investors continued to take profits which started last week after it hit a four-month high of 8,216.92. Sellers were in control of the market, desperately getting out of the market as they don’t believe this market can go higher,” Mangun said.

Last week also marked the end of five consecutive weeks of foreign inflows.

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