Equities seen ripe for consolidation after 8,500

LOCAL STOCKS may find fresh impetus for a lunge at the 8,500 mark this week following the death of two terrorist leaders that could spell the end of the morethan-four-month siege of Marawi City, before consolidating for some time, according to one analyst yesterday.

Trading was suspended on Monday due to a transport strike that nevertheless failed to paralyze Metro Manila and other major urban centers, as intended, since other major jeepney organizations stayed away.

“There has been a development in the Marawi and that will be a positive in tomorrow’s news,” Summit Securities, Inc. President Harry G. Liu said in a telephone interview on Monday ( Read story on S1/9).

“I think the 8,500 is easily breached then,” Mr. Liu added.

“From there, hopefully, there is consolidation in the mediumterm so that we can go higher levels strongly.”

Defense Secretary Delfin N. Lorenzana yesterday announced that government forces had finally killed Isnilon Hapilon, self-styled leader of the Islamic State in Southeast Asia, and Omarkhayam Maute, one of two brothers who allied with Mr. Hapilon to take over Marawi City last May 23, according to Reuters. The US had offered a $5-million bounty for information leading to Mr. Hapilon’s arrest, describing the 51-year-old as a leader of the Abu Sayyaf group, which the US considers a “foreign terrorist organization.”

“The Marawi incident is almost over and we may announce the termination of hostilities in a couple of days,” Reuters quoted Mr. Lorenzana as saying.

The Marawi crisis has been cited by credit raters and other analysts as a cause for concern in terms of the country’s attractiveness to investments, even though solid macroeconomic fundamentals should hold sway in seasoned investors’ minds.

The Philippine Stock Exchange, Inc. ( PSEi) has been closing at successive new record highs since September, the last one recorded on Friday last week, when PSEi ended at 8,447.94, up by 23.5% year to date. Drivers have been mixed, as persistent optimism over looming enactment of the first of up to five tax reforms that will help finance an ambitious infrastructure build added to impetus provided by bourses elsewhere.

Sought also for comment, Regina Capital Development Corp. Managing Director Luis A. Limlingan, recalled that “[ w] e had two consecutive years when the index fell flat.”

“I guess now we’re just making up for those two weak years.”

Many Asian bourses ended strongly yesterday, including the Nikkei 225, Hong Kong’s Hang Seng Index, South Korea’s KOSPI and the Jakarta Composite index closing 0.47%, 0.76%, 0.26% and 0.43% higher, respectively, although the Shanghai Composite Index slid 0.35%.

Mr. Liu said he sees support level this week at 8,400 and resistance at 8,500-8,550. PSEi is “still on an upward” trend, he said, adding that “fundamentals should just continue to be positive and we will see higher ground.” —