Philstocks awaits PSEi’s rally on economy’s prospects

THE local market is expected to move with an upward bias this year as long as the Philippine economy will see favorable developments, an analyst said.

“With the market at attractive levels, together with the local economy’s growth prospects, we see the bourse moving with an upward bias [in 2023],” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

According to Mr. Tantiangco, the economy is expected to further expand, though at a slower pace due to perceived challenges from high inflation, rising interest rates, and global economic headwinds.

In the third quarter of 2022, the country’s gross domestic product (GDP) grew stronger than expected at 7.6%, which brought the nine-month average growth to 7.7%. The latest quarterly figure is slightly higher than the revised 7.5% growth in the second quarter and the 7% growth in July-September 2021.

The economic growth figure for full-year 2022 is expected to be released by the Philippine Statistics Authority on Jan. 26.

“The local market may stage a strong rally if we see favorable developments with respect to the aforementioned challenges,” Mr. Tantiangco said.

“A decline in the Philippines’ inflation, which is possible due to the past policy rate adjustments by the Bangko Sentral ng Pilipinas (BSP), a slowdown in the monetary tightening of the central banks, and a resilient global economy may spur optimism,” he added.

Mr. Tantiangco said that unfavorable developments in the local economy could weigh on the local bourse. He said he remains to keep a bullish outlook as the market is seen to trade above the 50-day and 200-day exponential moving averages.

He placed the Philippine Stock Exchange index’s (PSEi) major support at 6,400, its immediate resistance at 6,600, and its next resistance between the 7,000 and 7,100 range.

Trading for 2022 was “anemic” after the bourse booked an average net value turnover of P5.92 billion, which is lower than 2021’s average of P7.38 billion.

“2022 has been a rough year for the local equities market,” Mr. Tantiangco said, adding that while concerns over the coronavirus pandemic and its impact on the local economy may have already dissipated, “the market transitioned to a new set of macroeconomic problems that dampened sentiment.”

On the last trading day of 2022, PSEi closed at 6,566.39, which is 556.24 points or 7.81% lower than its close of 7,122.63 on Dec. 31, 2021. — Justine Irish D. Tabile