By Denise A. Valdez, Senior Reporter
PHILIPPINE SHARES are seen moving sideways this week with an upside as investors got a confidence boost from the passage of a fresh stimulus package on Friday.
The benchmark Philippine Stock Exchange index (PSEi) ended Friday’s session at 5,967.96, up 65.57 points or 1.11% from a day ago.
On a weekly basis, the PSEi snapped a three-week losing skid as it closed higher by 182.87 points or 3%.
Value turnover went down 21% to an average of P4.74 billion last week. A single day of net foreign buying last week — P420.91 million on Thursday —reduced the week’s net outflows by 55% to an average of P427.57 million.
A few hours after the market closed on Friday, President Rodrigo R. Duterte signed a P165.5-billion stimulus program, the second piece of legislation that aims to mitigate the impact of the coronavirus pandemic on the economy.
The budget consists of a P140-billion stimulus package and a P25.5-billion standby fund.
The measure is seen to drive activity in the market this week as investors digested the development over the weekend, Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said.
“The newly signed economic stimulus package, the Bayanihan to Recover as One Act, could spark optimism in this week’s trading,” he said in a text message.
But he warned any market rally may not be sustainable as uncertainties continue to loom due to the growing coronavirus cases in the country.
“[I]nvestors are expected to watch out for the upcoming data on remittances, which has been one of the sources of strength of our economy, primarily consumption,” Mr. Tantiangco said.
Local coronavirus cases rose to 257,863 on Saturday after the Health department reported 4,935 new cases. Metro Manila continues to be the top location of new infections, where 13,722 new cases were found in the last two weeks.
Aside from local activities, online brokerage 2TradeAsia.com said investors will be watching out the meeting of the Federal Open Market Committee this week.
“Hopes are up… for a more encouraging message, which in turn may help ease risk-off sentiment stemming from both COVID-19 (coronavirus disease 2019) and geopolitical concerns,” it said in a market note.
“Deeper cuts, while generally not expected this soon, will resonate with regional central banks, particularly the Bangko Sentral (ng Pilipinas), to maintain a favorable currency differential,” it added.
2TradeAsia.com is putting immediate support for the market at 5,750 and resistance within 6,000 to 6,200. Philstocks’ Mr. Tantiangco meanwhile sees the PSEi moving within the 5,700 to 6,100 range.