Index may trade sideways

MANILA, Philippines — The benchmark Philippine Stock Exchange index (PSEi) may trade sideways this week, hovering around the 5,600 level as market investors continue to look for better indicators on the direction of the economy, according to analysts.

Last week, the PSEi finished in negative territory as foreigners dumped their shares.

This was due to a host of reasons such as Fitch downgrading its growth outlook on consumer spending in the Philippines and banking stocks experiencing some weakness.

Another factor adding to the negative sentiment surrounding the market is the issue surrounding Lopez-owned ABS-CBN, particularly the National Telecommunication Commission’s issuance of a cease and desist order against the media giant.

With these issues, another lackluster trading week could prevail in the market.

Unicapital said ABS-CBN stock might test the next support levels at P12 and P10.25 for a short term bounce play opportunity if it breaks below P15.

“We recommend to  buy for intraday bounce play near P12 and P10.25 with the objective of selling at P13 and above, place a mental stop if the stock closes below P10.25,” it said.

The regulatory issues are not really assuring investors even as ABS-CBN already filed for a temporary restraining order against the NTC’s move, analysts said.

On the corporate side, corporate earnings reports have started to come in and many companies have announced a deferral of many projects and significant reductions in their capital expenditures.

Thus, market investors are expected to continue to look for positive developments before they go back to the bourse.

Traders said the resolution of the coronavirus disease 2019 or COVID-19 pandemic, such as a permanent cure and an effective vaccine, would be the most important factor that would influence the direction of the market in the weeks to come.