STOCK-MARKET OUTLOOK

Last week

Share prices fell last week after foreign investors flocked back to the United States market following strong bank earnings, as trading patterns among local investors were seen as “directionless” despite the easing of quarantine restrictions.

The benchmark Philippine Stock exchange index (Psei) fell 50.36 points to close at 6,494.81 points.

The main index was only up for only 2 trading days during the week, as investors were selling their positions after making small gains.

average daily value for the week was low at P5.03 billion, while foreign investors were net sellers at P4.11 billion. Foreigners accounted for 36 percent of the total trade.

Other subindices ended mixed. The broader all Shares index fell 17.43 points to close at 3,981.51 points, the Financials index rose 5.85 to 1,393.32, the Industrial index declined 283.41 to 8,607.48, the holding Firms index dropped 15.48 to 6,616.88, the Property index shed 54.36 to 3,199.31, the Services index was up 12.77 to 1,442.11 and the Mining and Oil index plunged 472.94 to 8,971.25.

For the week, gainers led losers 135 to 95 and 20 shares were unchanged.

Top gainers were Manila Mining Corp. B, Lepanto Consolidated Mining Co. a and B shares, Benguet a and B, DFNN Inc., Seafront resources Corp. and Oriental Peninsula resources Group Inc.

Top losers City and Land Developers Inc., Cityland Development Corp., ever-gotesco resources and holdings Inc., Philippine estates Corp., acesite (Phils.) hotel Corp. and Universal robina Corp.

this week

Share prices may further decline this week as issues related to the government’s handling of the coronavirus pandemic have not lifted investors’ sentiment.

“Threat of ECQ [enhanced community quarantine]-inducing Covid spikes and escalating geopolitical tensions in the West Philippine Sea cast rain clouds over the horizon, which might pull index lower from its current base-building phase at around at 6,500 points,” broker 2Tradeasia said.

It said funds tend to follow market activity as some of the listed companies will start to release its first quarter earnings.

This week will also feature the annual stockholders’ meetings of the ayala group and property developers SM Prime holdings Inc. and Filinvest Land Inc.

2Tradeasia said the current situation makes the case for the mid- and small-cap listed companies appear appealing for trading.

“Mining shares, for instance, became market darlings after mining moratoriums have been lifted. In line with this, there may be spillover momentum towards provincial plays where mining tenements are present, as mine sites provide labor opportunities and local government unit revenues,” the broker said.

stock picks

Broker regina Capital Development Corp. advised to take profits on the stock of apollo Global Capital Inc., which became a darling for retail investors for the past months, as all indicators are showing a spike in buying pressure.

“all things considered, we do not expect another massive breakout anytime soon— sadly, likely no replay of the mid-january mining party—but apollo Global could still rally intra-day. Whether or not gains will be pared come closing depends on market volume,” the broker said.

It advised to monitor the stock’s 50-day moving average currently at P0.22, as it is this level where it could settle its price for the near-term. apollo Global shares closed Friday at P0.224 apiece.

Meanwhile, the broker advised to sell during rallies on the stock of BDO Unibank Inc. after it gained buying momentum after two weeks of sideways movement, breaching its initial resistance at P104 per share.

“Momentum indicators, however, are still showing a bias to the downside. This, plus the relatively low volatility, means that any rally BDO could possibly be capped at the next resistance at P106,” the broker said.

BDO shares closed last week at P104.80 apiece. VG Cabuag