November 21, 2017 | MANILA, PHILIPPINES

Sideways trading seen with Q1 GDP report in focus

LOCAL SHARES are expected to continue moving sideways this week as investors await details of the country’s first quarter gross domestic product (GDP) report due Thursday to provide fresh leads.

The bellwether Philippine Stock Exchange index (PSEi) edged down 0.30% to 7,815.53 on Friday from the previous week’s 7,841.99, though the latest level was still 14.25% up from the 6,840.64 recorded as 2016 ended.

“Investors will be waiting for Thursday’s release of Q1 GDP which could either justify a rally towards 8,000 or stir concerns, depending on the actual reported number,” Philstocks Financial, Inc. Senior Research Analyst Justino B. Calaycay, Jr., said in a mobile phone message.

PSEi last closed in 8,000 territory on Aug. 10, 2016 at 8,051.40.

Summit Securities, Inc. President Harry G. Liu said by phone that he expected the “market to improve a bit... [moving] sideways without any sudden crisis or problem global or local” and “long term, still maintaining strong trend up.”

“I think this year, the market will be good in breaking the 8,000 and above... [due to] many economic factors and developments for the Philippines.”

First-quarter GDP data is due out on May 18, with Socioeconomic Planning Secretary Ernesto M. Pernia earlier saying that the economy likely grew around 7% in those three months and could sustain that pace this quarter toward a full-year 6.5-7.5% official target.

A BusinessWorld survey of 13 economists and analysts late last week yielded a 6.8% first-quarter growth estimate median.

“Indications that would support the upper-end of this year’s economic growth outlook bode well for equities, as the benefits unfold in the coming months,” said in a report.

“We expect improved capex disbursement among listed firms in [second half] to support Dutertenomics’ ‘Build, Build, Build’ [infrastructure] drive, especially with the Finance bureau taking a more proactive role in unveiling the administration’s spending plan,” the online brokerage added.

“As such, attention could revert to infra[structure]-related plays, and those likely to take part in the construction supply stream. Buy on dips. Immediate support is 7,770-7,800, resistance [at] 7,900-7,950.”

The bourse will also join counterparts abroad in monitoring the next moves of newly installed South Korean President Moon Jae-in, particularly in the face of the north’s belligerent posturing.

“Any effort that could pacify military concerns from North Korea’s nuclear tests should keep a lid on political risk premium in Asia & benefit local shores,” said.

Sought separately for her outlook, Regina Capital Development Corp. President Marita A. Limlingan said she saw PSEi trading 7,700-8,000 this week. -- ICCD