Stocks seen sideways ahead of ASEAN, GDP data
INVESTORS will be looking this week at the outcomes of the 31st Association of Southeast Asian Nations (ASEAN) Summit and Related Summits as well as the release of gross domestic product (GDP) data for the third quarter to drive trades.
The market ended lower on Friday, but posted a second weekly gain. The Philippine Stock Exchange index ( PSEi) closed at 8,433.48, down 86.34 points or 1.01% from Thursday’s finish but higher than its 8,376.13 close last Nov. 3.
“This week, the first half, we’ll be watching out for any important announcements that may result from the ASEAN Summit. Later, all investors will be focusing on Philippines Q3 GDP, which is scheduled to be released on Nov. 16. We expect the pace of growth in the Philippines to have moderated to 6.7%,” Luis A. Limlingan, managing director at Regina Capital Development Corp., said in a text message.
The 31st ASEAN Summit and Related Summits started yesterday. Security concerns such as North Korea and the South China Sea are expected to be tackled during the talks happening until tomorrow.
The Philippines will be signing with some countries bilateral agreements on trade, tourism, and other key areas, and President Rodrigo R. Duterte is expected to have meetings on the sidelines of the summits, not only with ASEAN leaders but other world leaders like Japanese Prime Minister Shinzo Abe and Canadian Prime Minister Justin Trudeau.
Meanwhile, the GDP growth report to be released on Nov. 16 is seen to go either way, following mixed foreign direct investments, trade and manufacturing data released on Friday.
The economy grew by 6.4% and 6.5% in the first and second quarters, respectively.
Moody’s Analytics gave a 6.6% estimate for the third quarter, citing steady inflows of overseas Filipino worker remittances and a robust job market, and firm investment from government infrastructure projects.
On the other hand, Manuel Antonio G. Lisbona, president of PNB Securities, Inc., said the market might continue to consolidate this week.
“The market might continue to correct this week, as investors continue to lock in gains from the recent run-up,” Mr. Lisbona said in a text message. He added that they are expecting immediate support area of 8,300 to 8,350.
Meanwhile, Wall Street ended marginally lower on Friday, with losses in Intel and Apple as investors worried about the future of promised corporate tax cuts following dueling plans unveiled by Republican lawmakers.
US Senate Republicans released a tax plan on Thursday that differed from a version put forth by the House of Representatives on several key fronts, including putting off corporate tax cuts for a year.
Failure to cut corporate taxes would increase concerns about US President Donald J. Trump’s ability to pass legislation and could shake markets that have been banking on lower tax rates to boost company earnings. •