STOCK-MARKET OUTLOOK

LAST WEEK

Share prices gained last week on bargain hunting, with the main index returning to the 6,300-point level, as investors shrugged off the higher inflation figures for June.

The benchmark Philippine Stock exchange index gained 196.37 points to close at 6,361.82 points.

The main index was up almost all week long except on Thursday, when it gave up almost 1.5 percent, but it returned to its upward trajectory the next day.

Investors shrugged off the 6.1 percent inflation rate for June, which could prompt the local central bank to raise interest rates this month.

Value of trade were still low, averaging at P4.55 billion for the five trading days as foreign investors, which account for 43 percent of the trade, were net sellers at P1.45 billion.

all other sub-indices were up, with the exception of the Mining and Oil index that fell 272.15 points to close at 11,050.35 points. The all Shares index gained 70.64 to 3,410.76, the Financials index added 50.15 to 1,501.59, the Industrial index rose 261.80 to 9,314.81, the holding Firms index surged 314.67 to 6,036.81, the Property index was up 39.72 to 2,877.93 and the Services index climbed 10.22 to 1,671.83.

For the week, gainers edged losers 123 to 90 and 34 shares were unchanged.

Top gainers were Keppel Philippines Properties Inc., Liberty Flour Mills Inc., Lorenzo Shipping Corp., Ionics Inc., anchor Land holdings Inc. and Ph resorts Group holdings Inc.

Top losers were ipeople Inc., Philweb Corp., Keppel Philippines holdings Inc. a, Prime Media holdings Inc., DFNN Inc. and Medco holdings, Inc.

THIS WEEK

TRADING may remain volatile this week on lingering economic headwinds, such as the elevated inflation rate and the upcoming rate hike by the Bangko Sentral ng Pilipinas during the meeting of the policy-making Monetary Board by next month.

“The sustainability of (last week’s) rally is questionable, however, amid the lingering economic headwinds that may dampen sentiment. This includes the peso’s further weakening, and the supply problems of certain agricultural goods, both of which pose upside risks to inflation,” Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financials Inc., said.

he said investors may also watch out for the upcoming June inflation report of the United States as this would provide clues on how aggressive the Federal reserve will act in its next policy meeting. Investors may also take cues from the country’s upcoming foreign trade, foreign direct investments, and overseas Filipinos’ remittance data.

Broker 2Tradeasia said investors are bracing themselves for the further weakening of the peso against the dollar.

It said the further weakening of the peso “postpones most growth stories to no earlier than 2023, making underrated but resilient bargain plays more rewarding in the long term”.

“The key is to dig deep. after all, those who struck oil first looked underneath the desert.” The local market’s support is still seen at the 6,100 to 6,150 range, while resistance level is at 6,350 to 6,400 range.

STOCK PICKS

Broker regina Capital Development Corp. advised to trade the range on the stock of International Container Terminal Services Inc. (ICTSI) as it is staying faithful to its rangebound nature.

“It seems to be following a pattern of posting a steady rally to P200 before inevitably pulling back from the strong resistance. The underlying indicators are mixed. While there overall seems to be some semblance of downward pressure, we do not think there is enough steam to prompt a breakdown. If anything, ICT, in its rangebound nature, will likely just settle once more at its support of P180 before consolidating sideways,” the broker said.

ICTSI shares closed last week at P185 apiece. Meanwhile, it gave a hold recommendation on the stock of Jollibee Foods Corp. (JFC) despite its technical readings showing that its uptrend looks intact. The rising volatility is also making the swings that much larger and finicky, it said.

“JFC has the potential to once again break past the 210.00 resistance, but pullbacks are all too likely at this point, since there does not seem to be enough firepower. Nonetheless, JFC’S support at P200 will still likely hold as the stock has already cleared the sellers at this level and formed a stable base,” it said.

Jollibee shares closed Friday at P217 apiece.