Bargain hunt seen after steep PSEI drop
This week, following the local bourse’s plunge below the 6,000 level, might be brighter than most investors may have hoped for with bargain hunters likely on the prowl.
Trading platform 2TradeAsia.com said in an advisory over the weekend that while the Philippine Stock Exchange Index’s (PSEi) fall into bear territory may be a “knee-jerk reaction to negative headlines,” the descent was still “major and warrants caution in short-term trades.”
The benchmark stocks index closed on Friday at 5,862.59, its lowest closing value in 27 months and down 6.89 percent week-on-week. It is also well into the bear territory, as the PSEi has already declined by 22.4 percent from its recent high of 7,554 in October 2024.
What made the fall steep was a combination of a number of disappointing macroeconomic factors.
The Philippine economy in 2024 grew below the Marcos administration’s goal of 6 percent to 6.5 percent.
Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., pointed out that there were already signs and symptoms in the third quarter of last year, when gross domestic product growth was slower at 4.7 percent versus 5.2 percent in the same period in 2023.
“It’s clear that [the economy] still hasn’t recovered,” Ravelas said in an interview.
He added that US President Donald Trump’s reelection added to uncertainty in the stock market, particularly on his tariff policies and projected higher US interest rates.
Still, 2TradeAsia noted that there may be “potential attempts at recovery” this week, as the market’s current oversold condition may attract investors hunting for cheap stocks.
