The Philippine Stock Exchange
The Philippine Stock Exchange: On Bearish Trends
and Bull Markets
The Philippine Stock Exchange (PSE) took a beating in the last two days, May 19 and 20, that saw the PSEI closed to 6,870.90, with the banking sector leading the downhill streak. The bearish trend was a result of the sluggish U.S. economy and the territorial disputes in the South and East China Sea between China and other Asian countries, like the Philippines and Vietnam.
The China Issue on Territorial Disputes
China’s disputes with some territories in the South and East China Sea have intensified in recent years with neighboring countries like Japan, Vietnam, and the Philippines. raising a howl on China's incursions on disputed territories. It has intensified in such extreme in Vietnam, that led to an anti-Chinese violence flaring up in recent weeks. U.S. President Barack Obama visited Asia last month to reassure its Asian allies - Japan, Republic of Korea, Malaysia, and the Philippines on the US resolve to reinforce its strategic presence in Asia and the Pacific. This move is widely seen as a counter balancing move against China’s power flexing in the region. Recently, Washington put forth a strong rhetoric towards Beijing on its provocative postures against its Asian neighbors. With this rising rhetoric, it is everyone's hope that the territorial disputes and conflict be resolve soonest.
The Sluggish US Economy
The present U.S. economy is seen to be in a bull market, with the bearish trend expected to run aground by 2015 or two years from now. Past experiences have shown that an economic slowdown occurs every six years. Hence, investors still expect the year 2014 to be on a bull run. However, other economic indicators are lagging behind and dragging the bull down. What we see are – high unemployment rates, a GDP (Gross Domestic Product) that is running flat, and a housing sector that is wobbly and fragile. The economy as it is, looks bleak. Though 2014 is said to be a bull market, the average American is faced with a tough economy that is reeling with the pangs of recession at their very own backyards.
Former student Edgar Edgardo is among those investing his money in stock trading.
He is one of young Filipinos who realized early the value of investments.
Effect on the Philippine Stock Exchange
The stats the last two days, showed that 98 stocks advanced, 69 declined and 43 issues remained the same. The trading volume was attributable to the banking sector – Banco de Oro and Metro and Securities Bank. The outlook for August looks bleak as it is the ghost month for the Chinese. Nonetheless, it is expected that trading for consumer products will remain favorable and the foreign exchange market bullish, with the peso expected to remain stronger than the present P43.62 as against the U.S. dollar.
The Bottom Line
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