Share prices are expected to move sideways this week due to the uncertainty created by rising COVID-19 cases in the country.
Analysts said the recent move of the government to place Metro Manila and nearby provinces under stricter quarantine rules could have a significant impact on the already weak economy.
“Our revised model contemplates 30 days of stricter quarantine policy in the greater Metro Manila area beginning April, which is equivalent to 1/3 of the second quarter. This revision cuts GDP (gross domestic product) expansion to 5.1 percent for 2021 from an initial 7 percent… ,” online brokerage firm 2TradeAsia.com said.
It said the added strain in 2021 restrictions could also impact on 2022 GDP numbers.
“There is a lot of moving parts in trying to read the tea leaves for 2022, but optimism will ultimately stem from suppressing rising COVID cases,” 2TradeAsia. added.
The Philippine Stock Exchange Index last week rose 1.6 percent week-on-week to 6,545.17 on bargain hunting by investors following a sharp decline in the previous week.
The lower than expected March inflation print of 4.50 percent helped boost sentiment, pushing the index to as high as 6,651.71, short of the 6,700 resistance level.
BDO Unibank Inc. chief investment strategist Jonathan Ravelas said the low value turnover of the market reflected investors’ lack of conviction as the recent COVID-19 situation remains uncertain.
“The week’s close at 6,545.17 signals the market could still test the 6,300 levels in the near-term. Any rally could just be limited towards the 6,700 levels,” Ravelas said.
