By James A. Loyola Top Philippine online stock brokerage firm COL Financial believes there is still some steam in the current market rally but expects this to be capped by risks such as lower government spending and easing global economic growth. In a press briefing, COL Chief Equity Analyst April Lynn Tan said the Philippine Stock Exchange index is seen to end the year at 8,600, and not above 9,000, with some corrections along the way. She noted that, “twin deficits” (current account and budget deficits) are seen to limit the Peso’s strength and the decline in interest rates. Tan added that, the market could also be capped by slower growth of government investment and spending due to the delays in the passage of the 2019 budget as well as the election ban on release of public funds. Expectations of slower global economic could also hurt Philippine exports and remittances. On the more positive side, Tam pointed out that inflation has peaked last year and this could mean an end to interest rate hikes and a reduction in banks’ reserve requirements as well as boost consumer spending. Also seen as positives is the relative strength of the peso, the pause in US interest rate hikes, and return of foreign funds into the local stock market. Tan said local stocks still have attractive valuations. Based on technical charts, COL Chief Technical Analyst Juan Barredo said immediate upsides may be capped as the index may soon need to correct due to its stretched rebound with resistance at 8,200 to 8,300. “The firsthalf may be beset by zig-zag swings or wide patterns as some risks may cause opposing volatility. But, if the PSEi can remain over 7,300 (or better 7,580), then the rally posture may linger despite some pitstops and side reactions,” he noted.