Rising Middle East conflict seen keeping PSEI down
Investors may wait for the dust to settle in the Middle East before lifting the Philippine Stock Exchange Index this week after seeing declines. The benchmark index settled at 6,443 on Friday after reports that Israel launched a counterattack on Iran. This represented a 3.2-percent decline versus the previous week. Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said investors had already priced in “the worst of the conflict,” with bargain-hunters on the lookout for lower-priced shares. “The market would remain on a wait-and-see stance in the coming days and weeks on how future geopolitical events evolve,” he added.
The local market saw its largest sell-off this year and longest losing streak since October 2016 on Tuesday, April 16, after geopolitical tensions triggered nine consecutive sessions of declines.
But for Philippine Stock Exchange president Ramon Monzon, this is another challenge that will be conquered.
“It’s a global influence. The market will get over that. We always have these challenges but somehow the market rebounds,” Monzon told reporters last week.
But while the drop in share prices is making the market “even more attractive,” Japhet Tantiangco, research manager at Philstocks Financial Inc., warned that a “strong and sustainable” rebound may not be seen yet.
He noted that sentiment may highly depend on how Iran will respond to Israel’s counterattack. — INQ
