PSEi seen coasting as investors await 2018 results

THE BOURSE can be expected to coast at least through early this week, as investors await the release of listed firms’ 2018 financial results.

The Philippine Stock Exchange index (PSEi) shed 0.36% or 29.41 points to close at 8,070.89 last Friday. It fell by 0.9% or 73 points on a weekly basis, as most investors went on break for the Lunar New Year.

Net foreign buying persisted for the entire week, even as it was 38% less at P710 million on average, while average turnover plunged by a fifth to P7.47 billion.

“Despite the PSEi ending in the red this week, the uptrend is still intact. As a matter of fact, the pullback strengthens the rally as it keeps a cautionary sentiment and allows more investors to get back in,” Eagle Equities, Inc. Research Head Christopher John Mangun said in a weekly market note on Friday.

Mr. Mangun cited earnings reports and foreign inflows as catalysts for the week, which could support the PSEi’s uptrend if they come out within expectations.

Globe Telecom, Inc. and Ayala Land, Inc. are scheduled to release their full-year 2018 financial reports on Feb. 12 and Feb. 15, respectively. These firms account for 10.4% of the PSEi basket, or 17% including parent Ayala Corp.

“However, if earnings disappoint or if foreign money ceases to flow in, we may continue to see it trade between 7,800 and 8,100 for the following weeks as it builds momentum to go higher in the longer term,” Mr. Mangun added.

Online brokerage 2TradeAsia.com said investors will be on the lookout for other catalysts now that the central bank — in its first monetary policy review for 2019 just last Thursday — has confirmed market expectations of steady interest rates. “With the status quo on interest rates already factored into prices, attention would switch to sequels on consumer price trend, starting with hints of higher February electricity generation charges and implementation of increased water tariffs from rebasing,” 2TradeAsia.com said in a weekly market note.

And while the proposed P3.757–trillion national budget for 2019 has finally bagged legislative ratification, some provisions of the spending plan could still be vetoed by President Rodrigo R. Duterte should they turn out to contain irregular appropriations. The House of Representatives has threatened to question such a veto before the Supreme Court.

Companies could also be weighing the timing of capital expenditures for the year in the light of the May 13 midterm elections and rains expected next semester. “(C)onsideration will be given by listed firms on their respective capex rollout, factoring-in project timeline extensions ahead of May’s local elections and seasonal rainy season in third quarter,” the online brokerage said.

Investors will also be watching MSCI’s Feb. 11 rebalancing to see if they should adjust portfolios.

Mr. Mangun placed market support at 7,900-8,000 and resistance at 8,100-8,300. —