The local stock market will remain lackluster this week amid concerns over additional write-offs and credit losses.
For the week to Jan. 16, the PSEi tumbled 34.75 points or 1.75 percent to 1,950.13 points. Average value slid to P1.24 billion although average daily turnover increased to 1.37 billion sares.
Citiseconline expects some investors to take profits on selected stocks that have gone up recently.
Accord Capital Equities’ Jun Calaycay said investors will continue to stay on the sidelines as they await clearer signals before they come in.
“We can fairly expect the wait-and-see mode to persist through most of the month and maybe well into the second month when clues on fourth quarter performances of listed companies trickle in,” Calaycay said.
Calaycay said the market will be consolidating within the 1,970-2,000 band with deviations pushing the lines past both ends to 1,930 and 2,050, respectively.
With government’s commitment to pump-prime and sustain the economy through the infrastructure, energy and BPO (business process outsourcing) sectors, investors are expected to load up on counters allied to these industries.
“I would nevertheless still advice caution at this point with the index hovering between the high and low points of the earlier indicated range. Patience remains a virtue in today’s milieu,” Calaycay said.
The US Dow Jones has already lost 4.5 percent since last week and 9 percent since the start of the year, dashing hopes of an early year rally. AB Capital Securities said investors are also expected to monitor crude oil prices which have settled at around $35 per barrel despite the production cuts of OPEC member countries. “The massive unemployment and fall of the markets led to worries of a steep decline in consumer demand. OPEC forecasts a drop of 180,000 barrels per day in the world’s oil consumption while the US EIA (Energy Information Administration) expects consumption to drop 800,000 barrels per day,” AB Capital Securities said.