Philippine Market Outlook March 29, 2019

MARKET OUTLOOK

The main index firmed up on Thursday, albeit ending on a flattish note, as investors remained on the sidelines due to lack of leads.

After gaining some strength in the morning, the index was sluggish and ended the day flat. Even third-liner and speculative issues that were heavily traded since the beginning of the week have calmed down.

A positive move today will be extremely good for the market in the long term.

Market players may continue to stay on the sidelines while waiting for fresh catalysts.

Yesterday’s flattish trading was likely to carry over today given the lack of leads.

Wall Street rose modestly overnight, as US-China trade talks made headway, but a cut in quarterly GDP growth exacerbated fears of an economic slowdown and kept a lid on gains.

Against this background, top Chinese and US negotiators held their latest round of trade talks in Beijing Thursday, with hopes the two economic superpowers can find a deal to end their long-running tariffs row.

Analysts warned the meetings were “taking on ever more importance”.

An agreement between both parties is the key macro-economic event for H1 2019 and will dictate whether we have a slow and low global pullback or if the day of reckoning arrives much sooner and more aggressively.

The two-day meeting is the first since China put into law new measures seen as an olive branch in the high-stakes stand-off, offering to address key issues including intellectual property and forced technology transfer.

China has made unprecedented proposals on a range of issues including forced technology transfer, while the US could lift some tariffs on China, while leaving others in place as part of an enforcement mechanism on the trade deal.

It seems very unlikely that the trade issues would get resolved very quickly. They've indicated that they made progress so many times, it is a situation where investors want something more concrete rather than just talk of progress.