Eyes still on infra, corporate earnings

The focus of market participants will still be on how the government will start utilizing the funds for infrastructure development over the next months. They will also watch out for the initiatives of listed companies to pull off impressive earnings.

Online brokerage firm 2TradeAsia.com said that at this stage, the market is now waiting for the Philippine Stock Exchange index (PSEi) to break out from its present trading range, especially with supply coming out every time the barometer nears the 8,000 mark.

"Any hint on the commencement of infrastructure spending and efforts to support corporate earnings growth will reinforce investors’ valuation perception, especially those in the hunt for better returns," 2TradeAsia said.

As for the economic highlights, 2TradeAsia said that list of economic data will be monitored, which includes OFW remittances, balance of payment and gross international reserves.

"The interplay of these variables will be weighed with the peso-dollar trend, having breached an intra-week high of as much as R50.87:$1 last week. The same will be paralleled with importation demand for capital goods for third quarter, especially for entities preparing for the seasonal fourth quarter spending kick," 2TradeAsia said.

"Meanwhile, second quarter inflation will also be published which could reinforce expectations for an extension of the present policy on interest rates. Possible positive junctions might occur however, on Bangko Sentral ng Pilipinas chief Nestor Espenilla’s consideration to reduce the banking system’s reserve requirement ratio (currently at 20 percent), which could induce improved lending," it added.