Market to remain cautious

The local stock market is seen to remain weak, weighed down by recent bad news, although investors are seen to look for more cues from the release of more economic data as well as from the Bangko Sentral ng Pilipinas meeting on rates this week.

“Economic worries may continue to weigh on investor sentiment following the recent disappointing narratives including S&P Global Ratings’ 9.5 percent Philippine 2020 GDP contraction forecast and downbeat results from the BSP’s latest business and consumer confidence survey,” said Philstocks Financial Senior Analyst Japhet Tantiangco. He noted that these may extend the local market’s decline next week while trading could also remain anemic as many stay on the edge amid the market uncertainties.

This week, Tantiangco said: “Investors

are also expected to look towards the upcoming bank lending and money supply data, IHS Markit Manufacturing PMI, and the BSP’s policy rate decision for clues regarding the local economy’s condition.”

Meanwhile, Abacus Securities Corporation warned that market liquidity may begin to ebb with the recent approval of the initial public offering of broadband provider Converge ICT worth up to ₱41.5 billion.

“The upcoming IPO of Converge ICT may start to affect trading in the next two weeks. The size is relatively large compared to recent offerings and may induce selling as investors build up cash,” the brokerage noted.

Online stock broker 2TradeAsia.com noted that investors may also be looking forward to recovery in third quarter earnings. “Niche sectors that have significantly utilized capacity in the third quarter relative to the second quarter, such as provincial real estate, infra, and logistics, may be worth considering in the medium term,” it added.