Earnings, BSP meet to drive this week’s trading

THE market will look to the release of remaining financial reports of listed firms as the earnings season ends on Monday, as well as the Bangko Sentral ng Pilipinas (BSP) policy meeting on Thursday for leads this week.

The 30-member Philippine Stock Exchange index (PSEi) rose 51.19 points or 0.69% to close at 7,382.84 on Friday, while the broader all shares index went up by 11.78 points or 0.29% to end at 3,964.68.

Week on week, the benchmark index gained 42.07 points from its 7,340.77 finish on Nov. 5.

“Higher-than-expected [third-quarter] GDP (gross domestic product) print carried last week’s momentum in local equities, only to fall short after hitting 7,400,” 2TradeAsia.com noted in an e-mailed market note on Friday.

Last week, the Philippine Statistics Authority reported the economy grew 7.1% in the third quarter, better than the 11.6% contraction from a year ago but slower than the revised 12% GDP print in the second quarter.

For this week, market sentiment is expected to be spurred by the third-quarter financial results of listed firms as well as the central bank’s policy review.

“Investors will be waiting for a few more earnings. With inflation and GDP already released, attention will be given to the next BSP meeting,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message on Saturday.

“Global inflation has been a growing concern, so any economic data that will provide clues to the prices of goods will influence local movements as well,” he said.

The BSP is set to hold its monetary policy meeting on Nov. 18, Thursday.

“The number of cases will still be monitored, which will give hints as to whether the alert level will be heightened or loosened,” Mr. Limlingan added.

The Health department logged 1,997 new coronavirus disease 2019 (COVID-19) cases on Saturday, which brought active cases to 29,332. The Philippines has reported nearly 2.82 million COVID-19 infections since the pandemic struck.

Meanwhile, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said the deadline of same-party substitution for candidates in the upcoming national elections could also be a major catalyst for this week’s trading.

“Market sentiment could also be shaped by some leads related to the May 9, 2022 presidential elections,” Mr. Ricafort said in an e-mail on Friday.

The last day for the filing of substitution of candidates is Monday, Nov. 15.

“The political climate should heat up dramatically over the next few weeks — as the candidate pool gets finalized, so will speculations over regulatory and business risks of the next six years,” 2TradeAsia.com said.

RCBC’s Mr. Ricafort placed the PSEi’s immediate support at the 7,040-7,120 range, while resistance is pegged between 7,400 to 7,500.

Meanwhile, 2TradeAsia.com said immediate support is at 7,300, secondary at 7,200, while resistance is at 7,450. — Keren Concepcion G. Valmonte