Window dressing may lift PHL stocks after Trump
EARLY quarter-end window dressing may lift the main index this week as investors turn their focus overseas, with developments in the US expected to affect sentiment after the Trump administration failed to clinch approval for its health care bill.
Last week, the Philippine Stock Exchange index shed 75.40 points to end at 7,269.62 on Friday from its 7,345.02 close last March 17, with most sectors in negative territory.
Value turnover reached P6.5 billion, with losers trumping gainers at 102 and 80, respectively. Net foreign outflow averaged P668 million.
Mr. Trump suffered a stunning political setback on Friday in a Congress controlled by his own party when Republican leaders pulled legislation to overhaul the US health care system, a major 2016 election campaign promise of the President and his allies. House of Representatives leaders yanked the bill after a rebellion by Republican moderates and the party’s most conservative lawmakers left them short of votes, ensuring that Mr. Trump’s first major legislative initiative since taking office on Jan. 20 ended in failure. Democrats were unified against it.
“This outcome could rattle the market as it has some indications of instability in the Trump administration,” Luis A. Limlingan, managing director at Regina Capital Development Corp., said in a mobile phone message over the weekend.
“The week may get a kickoff from several Fed[eral Reserve] officials delivering speeches hence giving clues to the direction of the US central bank in the coming months,” added Mr. Limlingan.
Online brokerage 2TradeAsia.com said the local benchmark hovered around the 7,150-7,400 for the first two months of the year and investors may succumb to window dressing toward the end of the first three months.
“There might be some window-dressing for the final week of March, as fund managers rebalance their holdings ahead of their quarter-end review,” read the firm’s weekly report.
It added that investors would shift their focus to the upcoming triggering of Brexit on March 29, which will officially mark the event and commence Britain’s trade negotiations with the European Union.
It also noted that recent geopolitical concerns such a global populism trend, heightened tensions from North Korea’s unabated missile test launches and the impeachment of South Korean President Park Geun-hye could tip off the positive 2016 earnings results of listed firms.
“Any motion to move the scale on clearer economic directions could provide guidance for funds flow movement, including prospects for direct investments.”
For this week, immediate support is at 7,200 while resistance is at 7,350 to 7,400, according to 2TradeAsia.com. -- Janina C. Lim with Reuters