Philippine stocks are expected to move sideways with an upward bias ahead of the month-end window-dressing and release of second-quarter earnings by listed companies.
Online brokerage firm 2TradeAsia.com said the positive momentum due to improving macroeconomic backdrop, attributed to easing inflation rate and possible rate cut, would likely boost investor sentiment over the short to medium terms.
Investors are also anticipating positive comments from the Federal Open Market Committee (FOMC) meeting this week as the recent US inflation data fell in line with the Fed’s expectations.
Analysts said the positive earnings growth should help the index navigate the 7,000 resistance level.
Among the companies that will release second-quarter results this week are BDO Unibank Inc., Manila Electric Co. and Wilcon Depot Inc.
The upcoming “ghost month”, which occurs in the seventh lunar of the Chinese calendar, may increase friction, according to 2TradeAsia.com. The “ghost month” will begin Aug 4.
Analysts advised investors to gradually accumulate and pivot to companies that would benefit from lower interest rates given these scenarios.
The Philippine Stock Exchange index lost 0.97 percent last week to close at 6,726, as investors evaluated the impact of typhoon Carina on the economy.
Average daily value traded declined to P5 billion. Overseas investors were net buyers last week, with net inflows of P1.39 billion.
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