Market may see upward momentum this week.
Market may see upward momentum this week !-- -- Iris Gonzales (The Philippine Star) - May 6, 2019 - 12:00am MANILA, Philippines Investors are looking forward to a more buoyant stock market this week as foreign funds continue to favor the Philippines after a recent upgrade and with first quarter corporate results pouring in. Inflation and first quarter economic growth data are also expected to be released this week.
Recently, the SandP upgraded the Philippines' rating by one level to BBB+, citing the nation's strong growth outlook and solid public finances. Jonathan Ravelas, chief market strategist at BDO, said there are indications that the market may see strong upward momentum this week.
Last week, the market barometer PSEi rallied by 1.27 percent week-on-week to 7,967.98 on continued buying of global funds into the local markets.
"The week's close at 7,967.98 signals building momentum at play. Look for a sustained rally above the 8,000 and a decisive break above the 8,200 to signal breakout from the 7,700 to 8,000 consolidation levels," Ravelas said.
He said that a sustained break above the said levels could see the market hitting 8,400 to 8,500 levels. Some catalysts may come from increased government spending.
The government plans to speed up state spending growth to about 15 percent in the months ahead after a contraction in the first quarter due to a budget delay. This could boost spending in the second half.
Gabriel Jose Perez of Papa Securities said there's a lot of Philippines economic data to anticipate this week such as the inflation numbers for April and first quarter GDP. However, investors are seeing slower economic growth driven by delays in fiscal budget approval for 2019. The World Bank estimates Philippines' first quarter growth at 6.
4 percent. Bangko Sentral ng Pilipinas Governor Benjamin Diokno was quoted as saying that the BSP can move "much, much faster" in easing monetary policy after SandP's upgrade.