Market expected to consolidate this week

The stock market may continue to consolidate this week, but only if there are compelling catalysts such as rosy third quarter earnings, according to traders.

On Friday alone, however, the market ended on a weak note after a rebalancing of the Financial Times Stock Exchange (FTSE) as global fund manager reallocated their funds.

BDO Research, in a commentary said that the week’s close at 7,885.23 continues to highlight the market to consolidate within the 7,700 to 8,000 levels in the near-term.

“Expect the bounce to stretch toward the 7,900 to 8,000 levels in the near term. Failure to try the 8,000 level could cause some profit taking and retest the 7,700 level,” it said.

Last week, the PSEi rallied by 0.45 percent compared to the previous week’s close to settle at 7,885.23 as investors positioned ahead of the third quarter results.

“Market players are betting that with the lower inflation and interest rates, margin recoveries are more evident this time than in the second quarter of 2019,” BDO Research said.

The sale of a portion of a stake of Metro Pacific Investments Corp.’s stake in Metro Pacific Hospital Holdings Inc. (MPHHI) was finalized last week.

MPIC has signed definitive agreements under which global fund KKR and an affiliate of GIC will invest in MPHHI.

The deal raises P35.3 billion ($680 million) for MPIC but it sent MPIC’s share price nosediving by 3.16 percent to P4.90 per share on the day the news came out.

Chris Mangun of AAA Securities believes “the market has been asleep, in limbo, in a coma and is not likely to bounce soon.”

“Noticeably, every time it got above 8,000, sellers start to come in and buying pressure just wasn’t enough to convince more investors to come in. Hopefully, we see another run-up to above 8,000 before the end of the year,” he said in a television interview with ANC on Friday.