Sideways movement seen for market

MANILA, Philippines — The Philippine stock market may see lackluster trading this week as investors tread with caution, especially with the Nov. 1 meeting (Nov. 2 in Manila) of the US Federal Reserve.

This is according to April Tan, head of research of COL Financial.

“Investors will also get their leads from earnings because it’s earnings season already,” she said.

Joseph Roxas, president of Eagle Equities, said the Philippine Stock Exchange index (PSEi) may retest lows at 6,050 because of the upcoming long weekend and misconceptions on the PSE’s soon-to-be-launched short selling program.

“Most people think you can just short anytime. This is not true. You have to put up collateral and borrow shares first,” he said.

The PSE will launch short selling – the practice of betting on a stock market’s decline – on Nov. 6.

Juan Paolo Colet, managing director at China Bank Capital Corp., likewise said the failure of the index to hold above the important 6,150 support level last Friday would shift the tone of trading toward caution this week.

“Increasing US Treasury yields and the volatile Israel-Hamas conflict have dampened risk sentiment as investors wrestle with tight monetary policy, upward oil price pressure, and geopolitical tension,” he said.

BDO Capital & Investment Corp. president Ed Francisco said the market would move sideways, but added that if the government announces a Cabinet reshuffle, there might be volatility.

For its part, 2TradeAsia said developments on the ongoing Israel-Hamas conflict are likely to drive broad-based volatility in the medium-term, with potential significant downside risks tied to escalation.

“Already, safe havens have enjoyed extraordinary flows and regional currencies have fluctuated heavily over the past week; expect more protracted ‘real world’ impacts over the next few weeks, including possible oil price shocks, supply disruption from clogged Eurasian ports, among others,” it said.

Last week, the PSEi dropped by 123 points to 6,142 or down by 1.97 percent week on week.