Investors seek bargains amid post-typhoon market dip
During this shorter trading week, investors are seen to pick up some bargains after local share prices fell last week due to the damage caused by the typhoon and its expected impact on the economy.
“The local market is having a hard time getting past the 7,400 - 7,500 resistance range as the weakening of the peso together with offshore uncertainties weigh on sentiment. Consequently, the market is being hindered from continuing its bull run,” said Philstocks Financial Research Manager Japhet Tantiangco.
He noted that “with the local market still deemed to be attractive, we may see bargain hunting next week. The dovish monetary policy outlook of the Bangko Sentral ng Pilipinas is still expected to give the market support. More catalysts could be needed, however, for the market to get past the 7,400 - 7,500 range.”
Investors are expected to look forward to the corporate sector’s third-quarter reports, as upbeat corporate results are seen as one of the catalysts that could drive the market higher.
“Investors are also expected to monitor the movement of the local currency. An appreciation is expected to help in next week’s trading while a further depreciation is seen to weigh on the bourse,” Tantiangco added.
Online brokerage 2TradeAsia.com said, “the unfortunate impact of Severe Tropical Storm Kristine is to partly blame for the main index's big dip last week.”
“Initial estimates put the affected to be at around 2.3 million locals, primarily in key economic centers that will dent output in the fourth quarter and disrupt supply chains, particularly agriculture and industry in Northern Luzon,” said the brokerage firm.
Thus, it said, “a pause from funds might be warranted as the full scale of Kristine's impact has yet to be gauged, not to mention its possible reentry and side-by-side with another cyclone (Leon) intensifying over the weekend.”
Absent other catalysts, 2TradeAsia.com expects this week's month-end window dressing period “might be an opening for traders to position and bet ahead of the US poll and Fed cut week, especially given the timing on the earlier RRR cut implementation that should further inject available cash flow for trading.”