By Madelaine B. Miraflor

As another trading year is closing in a few weeks, transactions in the local stock market is going to be mostly about fund reallocations, which would boost trading activities in the next few days.

Online brokerage 2TradeAsia.com said that on the back of a possible increase in consumer spending, among other factors, fund managers are expected to reallocate funds moving forward or before the year ends.

The firm noted that with 11-month average inflation benign at 3.15 percent following November’s 3.3 percent, stable policy decisions are seen from the Bangko Sentral ng Pilipinas (BSP) that should keep lending operations buoyant until the close of 2017.

“Any potential price hike will largely be season-related, in light of increased remittance and spending for the Christmas holidays. Parallel to improved consumer spending, the savings should also benefit in the overall equation, leading to increased potential investible funds,” 2TradeAsia said.

“With this backdrop, expect fund managers to reallocate funds on available follow-on offers, or those with similar initiatives at the onset of 2018,” it added.

Week on week, Philippine Stock Exchange index (PSEi) inched up by 2 percent, or 160 points, to end at 8,304. All sectors also managed to end the week in green, led by industrials and holding firms.

“The Philippines tried to establish new trading ground breaking past the 8,200 as part of the Christmas rally along the regional peers. Many are looking at the US tax reform, which is likely to cut taxes for both large and small firms, with cut in the statutory corporate rate to 20 percent in 2019 and a significant individual tax deduction for pass-through profits in 2018,” Marita Limlingan, president of Regina Capital Development Corp., said.