Philippine stocks are expected to move sideways on thin volume during this shortened trading week, analysts said over the weekend.
Financial markets will be closed on Monday and Tuesday for the Christmas holiday.
China Bank Capital managing director Juan Paolo Colet said the final three trading days of the year would see a mix of window-dressing and bargain-hunting, with the index poised to end 2023 on a positive note.
Colet said the market rally in recent days was driven by growing expectations of interest rate cuts next year despite the Bangko Sentral ng Pilipinas’ previous statement that monetary policy should remain tight for some time.
“Investors will also have reason to cheer the cooler-than-expected US November personal consumption expenditures price index, the preferred inflation measure of the Federal Reserve, which reinforced bets that US monetary policy will loosen as soon as March 2024,” Colet said.
Online brokerage firm 2TradeAsia.com said the market’s recent rally was also in line with improving macroeconomic fundamentals.
“Expect more buoyant movement in the coming sessions as December-January season has historically been the most successful trading months for the benchmark index,” 2TradeAsia.com said.
The Fed’s signal of three rate cuts in 2024 are likely to provide investors in banks, real estate companies and other firms with maximum risk reward, according to analysts.
The bellwether Philippines Stock Exchange index rose 0.35 percent last week to close at slightly above the 6,500 level, while the broader all-shares index advanced by 0.52 percent to settle at 3,427.30.
Foreign investors were net sellers last week by P712 million, while the average daily turnover was steady at P5.58 billion.