Philippine Market Outlook April 15, 2019

MARKET OUTLOOK

Local equities may move sideways in the week ahead as analysts expect thin trading due to the Lenten season break.

Sessions might stay limited during a three-day trading week given the Lenten pause.
Financial markets will be closed on April 18 and 19 for Maundy Thursday and Good Friday, respectively. Trading resumes next Monday.

While many expect the PSEi to trade sideways due to lack of fresh catalyst, it’s also possible for the bourse to test if it can stay above 7,800 as central bankers and finance chiefs signal worries about global growth which is tilted to the downside.

The International Monetary Fund (IMF) concluded its meeting this weekend, with global finance officials acknowledging the slowdown in global economic growth.

The IMF said its members have agreed to “act promptly to shore up growth for the benefit of all,” while expecting stronger growth by H2 of 2019 leading into 2020.

If a supportive statement can be seen from them for the markets this week then we may see an upside move for the PSEi after the Holy Week.

After the Holy Week break, investors will also look at how the local central bank will address cooling inflation. Central bank Governor Benjamin E. Diokno earlier said policy easing will be on the table during their next policy meeting on May 9.

Fund managers might position on central bank chief Diokno’s early hint for monetary easing ahead of their next meeting in May, which might either be in the form of cuts in interest rates or lowering of reserve requirement.

Investors, will instead also look forward to upcoming earnings reports.

Q1 results will help validate the strength of corporate earnings growth — an integral component to justify valuations.

The market’s immediate support is pegged at 7,500 for this week, with resistance from 8,000 to 8,100.