WEEKLY STOCKS OUTLOOK: Bargain hunting set ahead of 2024 GDP data

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Some bearish sentiment lingers

Investors are likely to hunt for bargains ahead of the January 30 release of GDP data for 2024, but not enough to drive strong rallies as bearish sentiment lingers.

Market players will wait the market out until a strong catalyst evolves later in the week, with the government scheduled to release the 2024 GDP on Thursday. This comes just hours after the US concludes its first policy rate-setting meeting of the year.

The bearish tone of the market comes from “worries over the US planned protectionist policies,” said Japhet Tantiangco, analyst at Philstocks Financial Inc.

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Investors may opt for bargain hunting given the three-week decline of the market but bearish mood continues to linger.

“However, we do not expect a strong rally yet as investors continue to wait for catalysts. For clues, investors are expected to watch out for our upcoming GDP data as well as the Federal Reserve’s first policy meeting for the year,” Tantiangco said.

The main index seemed to have met resistance at 6,400 last week ahead of the Fed’s meeting, said online stock broker 2tradeasia.com.

On top of the impetus from the US trade moves under the administration of President Donald Trump, the Philippines’ gross domestic product numbers are coming out amid explicit hints that the government will miss its growth target of 6 to 6.5 percent.

On Feb. 3 the market is expected to take its cue from the rebalancing of the main PSEi when a reshuffled index takes effect.

At the close of trading on Friday, the Philippine Stock Exchange announced that real estate investment trust AREIT Inc. and China Banking Corp. are joining the 30-company PSEi starting Monday next week.

The reshuffling was a result of the PSE’s performance review of listed companies from January to Dec. 2024.

As part of the review, Nickel Asia and Wilcon will form part of the PSE MidCap index., while Philippine Seven Corp. will replace DDMP REIT Inc. in the 20-member midcap benchmark. Robinsons Land Corp. will join the PSE Dividend Yield index instead of International Container Terminal Services Inc.

Pryce Corp. meanwhile is replacing Fruitas Holdings Inc. in the Industrial sector index.

A publicly listed company must be among the top performers in terms of liquidity and market capitalization to qualify for a slot in the indices. It should also maintain a free float level of at least 20 percent of its outstanding shares.

On Friday, the Philippine Stock Exchange index closed down 55.92 points or 0.88 percent at 6,296.20.

The broader All Shares index eased 22.39 points or 0.6 percent to 3,681.34.

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