The Philippine Stock Exchange index (PSEi) is seen to remain under pressure as trades resume on Tuesday following the four-day break. Some analysts have different sentiments as they see that the local index could still reclaim the 8000 level while others still see caution.
Here are three fast facts on the PSEi forecast as trades resume.
1. The PSEi could remain under pressure as investors anticipate on the likely effect of US President-elect Donald Trump’s presidency to the emerging markets.
Trump will be inaugurated as the new president of the US on Jan. 20. The business tycoon turned president has brought jitters to emerging markets like the Philippines with his “America First” perspective, stating that he would punish firms that will bring more jobs overseas.
These sentiments were seen to be a potential harm for business process outsourcing (BPO) industry. The PSEi has failed to rebound to the 8000 level since Trump won the November elections, although other global and domestic factors contributed to the decline as well.
“Nonetheless, focus will likely be on transition of the US administration on Jan. 20, as investors bet on robust fiscal spending to boost the US economy,” the online brokerage, 2TradeAsia.com, said.
2. The PSEi, however, could still recover to the 8000 level as the Duterte administration could come up with the comprehensive tax reform.
BPI Securities president, Michaelangelo Oyson, said that the country’s strong gross domestic product (GDP) data and the possible delivery of the proposed tax reform package are keeping positive sentiments to the local stock market.
“Foreign investors came back when the dust settled and found solace in the strong economic numbers of the Philippines,” The Philippine Daily Inquirer reported Oyson, as saying.
Jose Mari B. Lacson, head of research at ATR Asset Management, Inc., also said that the investors could still be bullish given that local companies remain liquid and the growth of these companies are positive. “A lot of companies are still healthy in terms of earnings growth and if we’re pushing for infrastructure spending and tax reform that should provide additional space for earnings to accelerate,” Business World reported Lacson, as saying.
3. Factors affecting the PSEi during the first month of 2017 trades include local inflation data and the manufacturing data from the US and China.
The local market will also find sentiments over the US jobs report which is due to be released on Friday. The Philippine Statistics Authority (PSA) will release December and full-year 2016 inflation data on Thursday.
What do you think of the PSEi forecast as trades resume on Tuesday? Let us know in the comments section below.