Earnings results to drive market
Stock market investors will be keeping a close watch on corporate earnings results this week, which will hopefully put an end to weeks of volatility.
“About a third of the index will report earnings in the coming week, which should generate some excitement, especially as some of these names are hegemons in their respective sectors. These include SM Prime Holdings, BDO and Metrobank,” stock portal 2TradeAsia said.
It pointed out that earnings calls should remind investors that while external factors partly shape fundamentals, ultimately, corporate leadership, strategy and product, service quality relative to competition is what drives value.
This would hopefully put an end to weeks of volatility, 2TradeAsia said, noting that the past few sessions have been characterized by softer turnover, averaging below P5 billion in the past week.
This was a 50 percent reduction compared to the P10 billion average turnover between December and January when the index’s swing was not apparent.
Last week was another volatile session for the domestic stock market as the benchmark Philippine Stock Exchange index (PSEi) fell by 93 points or 1.37 percent to 6,685.
2TradeAsia said the local bourse’s descent last week continued as more policy tightening pushed pessimists to the forefront.
For this week, 2TradeAsia sees the index’s immediate support at 6,500, resistance at 6,800.
For its part, Unicapital Securities said amid the lack of solid catalysts, the market was mostly down the past weeks.
It noted that investors remain uncertain on the continuation of interest rate hikes ahead of the release of the minutes of the most recent US Fed meeting.
“Similarly, Philippine investors remained uncertain of the Bangko Sentral ng Pilipinas’ interest rate road map as it may stagnate economic growth,” it said.
Moving forward, Unicapital Securities said at the current levels, it expects the index to continue to trade with a downward bias as it seeks support levels amid macroeconomic uncertainty.
“Conversely, from a fundamental perspective, this signals accumulation across support levels as we continue to project sequential macroeconomic improvements in the coming quarters,” Unicapital said.