STOCK-MARKET OUTLOOK

Last week

Share prices fell last week as trading was lethargic with many investors still reeling from the possible effects of ABS-CBN Corp.'s franchise denial on other regulated firms, while some are bracing for the worst during the second quarter reporting season.

The benchmark Philippine Stock exchange index (Psei) declined 108.63 points to close at 6,088.75 points.

The main index swung back and forth during the week, losing as much as 2.5 percent on Wednesday, but recovering most of it the following day. It declined by the end of the week.

average value of trade for the week was low at P4.65 billion, while foreign investors were net sellers at P3.75 billion.

all other subindices finished in the red led by the all Shares index that fell 73 points to close at 3,579.60 points, the Financials index was down 23.29 to 1,198.45, the Industrial index shed 243.89 to 7,417.65, the holding Firms index declined 123.55 to 6,405.71, the Property index lost 40.29 to 2,940.90, the Services index retreated 18.05 to 1,417.42 and the Mining and Oil index plunged 222.03 to 5,112.03.

For the week, losers edged gainers 169 to 66 and 13 shares were unchanged.

Top gainers for the week were MRC allied Inc., the a and B shares of ATN holdings Inc., Discovery World Corp., Boulevard holdings Inc., Transpacific Broadband Group International and Manila Broadcasting Co.

Top losers were United Paragon Mining Corp., Lodestar Investment holdings Corp., altus Property Ventures Inc., Macroasia Corp. and Benguet Corp. a.

this week

Share prices may remain down this week as the lack of optimism has forced investors to stay on the sidelines.

“We expect it [Psei] to maintain its course to test support at 5,950 points in the coming week. The biggest concern that is troubling investors is the lack of spending by the public. Our economy is consumer based and relies on strong consumer demand and spending. although most businesses are fully operational and most have gone back to work, spending remains low because of restrictive social distancing measures,” Christopher Mangun, research head at aaa Securities Inc., said.

Meanwhile, 2Tradeasia said the swifter the spread of the virus is contained, the earlier the lockdown can be lifted and the faster the industries can absorb the stimulus even with the decline in consumer consumption.

“The Psei's trajectory should move inversely to the coronavirus [infections] curve; that is, efforts to flatten the Covid-19 curve will be key to bend share prices upward,” the broker said. It sees support level for the main index between 5,500 to 6,000 points and resistance at 6,400.

stock picks

Broker regina Capital Development Corp. gave a "sell" recommendation on the stock of Puregold Price Club Inc. after it closed at the P48-per-share level, canceling out the gains it made during the earlier trades.

“It peaked at P49.05—a two-month high—before selling momentum overtook and pushed prices down. Indicators, however, remain on strong buy signs. at this point, the stock is still trading above its moving averages,” it said.

“This may indicate a possible correction in the next days, so taking advantage of the elevated price may be wise for those who are in a favorable position."

Shares of Puregold closed Friday at P48.65 apiece.

Meanwhile, it gave a "trade the range" advice on the stock of Metro Pacific Investment Corp. (MPIC) after it recovered from its four-day losing streak and got back to its support price of P3.17 per share.

“however, indicators remain strong on sell signs despite the tapering momentum. It is likely that the bounce back may prompt the beginning of sideways consolidation at a new range—albeit lower relative to the past month. The next level to watch now is its strongest resistance at P3.45,” the broker said.

MPIC shares closed last week at P3.26 apiece.