Bargain hunt seen lifting PSEi
Investors may take advantage of the local bourse’s six-month low this week and gobble up some cheap stocks. This may potentially set up a recovery for the market, although negative sentiment from the government’s flood control investigation lingers.
Japhet Tantiangco, research head at Philstocks Financial Inc., said bargain-hunting may be the local stock barometer’s key to an uphill climb after five consecutive days of declines.
“A strong rally is not yet expected, however, until the market finds a strong positive catalyst,” Tantiangco said over the weekend.
At the same time, he noted that investors would remain glued to corruption allegations and developments in Congress’ continuing probe into anomalous flood control projects . These have since included several high-ranking government officials.
As more names surfaced during hearings last week, the benchmark Philippine Stock Exchange Index (PSEi) plunged into a six-month low and nearly touched its 6,000 psychological support level.
By Friday, the PSEi had fallen by 237 points week-on-week or 3.8 percent to close at 6,027.
The weak peso was also a contributing factor. Last Thursday, the local currency slumped to 58.10 against the US dollar, also due to the probe on corruption.
This was its weakest closing value since Aug. 1, data from the Bankers Association of the Philippines showed.
At the same time, investors may also react to upcoming US consumer spending data. The data could drive the Federal Reserve’s policy direction, according to Chinabank Securities research director Rastine Mercado.
“If prices continue to hold above the 6,000 level through Tuesday, then we could expect to see some bargain-hunting materialize by mid-week before potentially tapering off ahead of the US employment report due Friday,” Mercado said in an email.
