Trading likely to remain choppy this week - analysts

MANILA, Philippines - Trading for this week is expected to remain choppy with a slight negative bias as investors stay on the sidelines and wait for market conditions to stabilize and improve, analysts said.

“Local equities might start the week mixed, as regional investors go on their ‘wait-and-see’ mode, to check if market psychology would tilt on the US market’s ability to reverse an earlier 167-point decline Friday, or otherwise,” said stockmarket portal 2tradeasia.com.

Jasper Jimenez of BDO Securities said investors will continue to track developments overseas before committing to a purchase. Weakening global economies are putting pressure on markets this week.

2tradeasia.com said global market developments are likely to overpower local headlines, even after inflation for January came out better than what most economists anticipated. Select large caps might still succumb to profit-taking as some investors switch part of their funds either at the fixed-income market.

Last week, the PSEi fell 3.3 percent as investors dumped stocks heavily amid uncertainties on the local economic front given concerns over inflation, rising costs, and interest rate hikes.

Maria Arlysa Narciso of AB Capital Securities said some investors have expressed concern about a possible El Nino-induced drought which would affect crop production, and food, power and water supply.

 “Consumers may bear the brunt of this by paying higher fees or having power outages. Higher cost of living and rising prices of basic commodities spell higher inflation for the country. Although there is still growth seen, the pull is slowly becoming a heavy burden for consumers. With El Nino becoming an increasing concern, the business community is beginning to view it as a threat to the first quarter growth and likewise affect the economy negatively,” Narciso said.

Just last week, Meralco announced it was increasing generation charges this month.