Positive momentum to boost stocks this week
OPTIMISM may prevail among stock market participants this week even as caution remains following recent security issues that dampened trading toward the end of last week.
Last Friday, the Philippine Stock Exchange index (PSEi) gave up 19.83 points or 0.25% to finish at 7,907.66.
The broader all shares index also retreated by 14.19 points or 0.30% to 4,716.13.
Week on week, however, the bellwether PSEi still ended higher than its 7,867.49 close last May 26. The all shares gauge also rose from the week prior’s 4,689.88 finish.
Harry G. Liu, president of Summit Securities, Inc., said he expects the market to rally after the weekend provided an explanation on what happened at Resorts World Manila after midnight and into early morning on Friday.
Mr. Liu also cited the US market as fueling the market’s rise and continue the consolidation “after the market’s softness last Friday.”
“A factor that can spark the market volatility upward would be any good news on the crisis in Mindanao,” he said. “We need to normalize the peace and order situation.”
Marawi City in Mindanao remains gripped by a terror attack that started on May 23 and prompted the declaration of martial law over the entire southern third of the Philippines.
Meanwhile, in Luzon, police pointed to a lone gunman to have caused the death of 37 guests and employees of Resorts World Manila, the casino- hotel- mall complex in Pasay City owned and operated by listed company Travellers International Hotel Group, Inc.
Authorities on Sunday disclosed the identity of the gunman, who police said took his own life after setting fire on parts of the casino and hotel.
Because of the incident, Travellers International was among the top losers last Friday as it plunged by 7.94% to P3.13. The company, which trades under the stock symbol RWM, dragged with it other stocks in the leisure sector, including its parent firm Alliance Global Group, Inc.
Rene M. delos Reyes, trader at Abacus Securities Corp., said it held a “cautiously optimistic” view on trading for the week, adding that the market is in consolidation mode.
“But immediate technical resistance [ for the PSEi] at 8,018 is within striking distance,” Mr. Delos Reyes noted.
“A breakout above that could see the index testing 8,136,” he added. Summit Securities’ Mr. Liu said another factor that could help boost the market is the administration’s tax reform “if crafted properly for the benefit of the people and the growth of the country.”
The first of four tax reform packages • designed to help fund the government’s ambitious P8trillion infrastructure buildup toward 2022 • last Wednesday bagged the House of Representatives’ final approval, as targeted, leaving the ball now in the Senate’s court.