Market to remain range bound this week

The market, through the benchmark Philippine Stock Exchange index (PSEi), is seen trading at a range of 7,000 to 7,400 this week, traders said.

Only a break above the 7,500 levels could “call the bulls back into play,” said Jonathan Ravelas, chief market strategist at Banco de Oro.

The week’s close at 7,269.62 continues to highlight the market to remain range bound between the 7,000 and 7,400 levels in the near term. A break below the 7,150 levels suggest further weakness toward the 7,000 levels. Only a break above the 7,500 levels could call the bulls back into play,” Ravelas said.

Last week, the local equities market took a beating from Wall Street’s descent during the early part.

This as global investors weighed on whether US President Donald Trump could actually implement his pro-growth policies and get the support of the legislative body, according to online market research portal 2TradeAsia.com.

As such, the benchmark PSEi lost ground and weakened 75 points at 7,269, down by 1.03 percent week-on-week, with most sectors in red territory.

Turnover reached P6.5 billion, with losers and gainers, 102 to 80.

Net foreign outflow averaged P668 million.

Moving forward, 2TradeAsia.com said investors would assess how the market performed the first quarter of the year.

“For most of March, we saw the local benchmark trading 7,150 to 7,400, which continued similar sideways trend made for the first two months of the year. Nonetheless, there might be some window-dressing for the final week of March, as fund managers rebalance their holdings ahead of their quarter-end review,” it said.

This week will also see the market debut of Wilon Depot Inc., the home and construction supplier owned by the Belo family. The company will be the first company to brave the market this year.

Wilcon will list on March 31 to raise P7.034 billion from an offer of 1.3 billion shares.

As for other concerns, 2TradeAsia.com said despite positive earnings results of listed firms for full year 2016, there are geopolitical concerns that remain present and could weigh on the fundamental merits in equities trading.

“These would include issues related to global populism trend, heightened tension from North Korea’s unabated missile test launches and impeachment of South Korea’s Park Geun-hye, among others. Any motion to move the scale on clearer economic directions could provide guidance for funds flow movement, including prospects for direct investments,” it said.

As such, it advised investors to maintain a defensive stance as markets in general are still waiting for key macro catalysts.