The PHILIPPINES ‘stocks are considered volatile this year due to concerns over the 2019 coronavirus disease (COVID-19) pandemic and the upcoming national elections.
The Philippine Stock Exchange index (PSEi) plunged 211.93 points or 2.88% to close at 7,122.63 last week, while the broader index of all stocks fell 65, 26 points or 1.68% at 3,818.12.
Week after week, the PSEi barometer has lost 59.23 points from its close of 7,181.86 on December 24.
The local stock market was down 17.08 points or 0.2% from its close of 7,139.71 at the end of 2020.
“Compared to the lowest strict COVID-19 lockdown level of 4,039.15 posted on March 19, 2020, the PSEi has consistently posted total gains of 76.3% at the end of 2021,” said Michael L. Ricafort, chief economist of Rizal Commercial Banking Corp. (RCBC). an email sent this weekend.
For this year, market movement will continue to be driven by COVID-19 developments and the May election, which is expected to increase spending in the first half of the year, online brokerage 2TradeAsia.com said in an email.
Recent spikes in cases in South Asian countries could affect markets in the first quarter, he said.
“That shouldn’t make 2022 any less forgiving for a trading year than 2021, just without the benefit of the base effect, but with better start-of-year fundamentals,” 2TradeAsia.com said.
Meanwhile, despite the government’s failure to meet its goal of vaccinating 54 million Filipinos by the end of 2021, 50 million people were still fully vaccinated, which could help calm the market, the brokerage added. .
Meanwhile, Regina Capital Development’s sales director Luis A. Limlingan said trades in the coming weeks will be difficult to predict amid tighter mobility restrictions due to increasing cases of COVID-19 and increased infections of the Omicron variant.
“My best guess is that business will take off slowly as investors monitor daily cases and assess which companies will be most affected by the Level 3 alert status,” Limlingan said.
The national task force placed the National Capital Region (NCR) under Alert Level 3 from January 3 to 15 amid a further increase in cases.
OCTA Research Group, a private research firm, said earlier that NCR is at high risk of transmitting COVID-19 as the positivity rate in the capital is now 28.03%.
“Tracking in sports is that extra swing needed to complete a move, and just like the market follows the law of physics, it needs a tracking event. Strong headwinds on the horizon are probably enough to help the index generate a leak speed of 8,000, ”2TradeAsia.com said.
The brokerage has placed immediate support for PSEi at 7,100, while resistance is at 7,300-7,400.
Meanwhile, RCBC’s Mr. Ricafort placed immediate major support for the benchmark at 7,060 and immediate resistance at the levels of 7,200-7,260. – MC Lucenio