Index weakness seen lingering
We may see bargain hunting next week. However, we may not see a strong rally yet as the market continues to contend with economic concerns
Daily TribuneWe may see bargain hunting next week. However, we may not see a strong rally yet as the market continues to contend with economic concerns
Analysts are not seeing any immediate recovery in the benchmark Philippine Stock Exchange index, which has already accumulated a total loss of 16.36 percent after declining for six consecutive weeks.
By the end of September, the market is trading at a Price to Earnings Ratio of 15.08x — way below its last five-year average of 20.58x.
Philstocks research manager Japhet Tantiangco said investors may hunt for bargains next week to offset the losses.
"We may see bargain hunting next week. However, we may not see a strong rally yet as the market continues to contend with economic concerns," Tantiangco said.
"This includes the increase of our national debt, rising yields both at home and in the US, the peso's weakness, and recession worries abroad," he added.
Inflation numbers awaited
Investors are also expected to deal with the country's September inflation data which may come in faster than the preceding month's 6.3 percent.
Aside from this, investors are also expected to watch out for the Philippines' S&P Global Manufacturing PMI and labor force data for clues on how the local economy will fare.
Chart wise, the market's support is now seen at 5,700. Its initial resistance is seen in the 6,000 – 6,100 range.
In a separate analysis of the market, 2TradeAsia, the online arm of F.Yap Securities, said PSEi trading at the 5,700 level was reminiscent of the Covid-19 lockdown era in 2020.
"The broader market continues to be weighed here depending on where the inflation shakes out in the next quarter, but on an asset's basis, there may be movement worth pursuing, especially once the nine-month results are out, and the picture of 2023 CAPEX becomes more visible," it said.
"While no sector is immune to higher cost of debt or squeezed out purchasing power, there are merits to sticking to reliable plays with little exposure to floating dent, forex volatility, and which can take advantage of historically more volume-based consumer demand in Q4."
On Friday, the market declined by 93.18 points to 5,741.07, 3.26 percent lower than Thursday's close. The net market value turnover was at P6.32 billion, stronger than the previous day's figures.
