STOCK-MARKET OUTLOOK
Last week
Share prices continued to rise last week, with the main index almost touching the 6,800-point level, after the country gained new special drawing rights from the International Monetary Fund (IMF).
The benchmark Philippine Stock exchange index (Psei) gained 153.40 points to close at 6,786.62 points.
The main index made significant gains on Tuesday and Wednesday, when it closed at 6,822.15 points, before succumbing to selling pressure towards the end of the week.
average daily trading for the week was slightly higher at P6.34 billion, while foreign investors, which accounted for 37 percent of the trades, were net buyers at P2.03 billion.
Most of the subindices closed higher led by the all Shares index that rose 80.39 points to close at 4,204.11 points, the Financials index gained 8 to 1,437.32, the Industrial index increased 198.74 to 9,847.76, the holding Firms index climbed 151.19 to 6,760.88, the Property index fell 25.75 to 3,093.92, the Services index soared 121.53 to 1,757.56 and the Mining and Oil index was down 24.22 to 9,125.44.
For the week, gainers led losers 120 to 101 and 30 shares were unchanged.
Top gainers were Philippine Trust Co., Globe Telecom Inc., PLDT Inc., Metro alliance holdings and equities Corp. B shares, Primex Corp. and Macay holdings Inc.
Top losers were Makati Finance Corp., Discovery World Corp., Philodrill Corp., Pacifica holdings Inc., Manila Broadcasting Co. and
Kepwealth Property Phils. Inc.
this week
Share prices may start to decline this week as Covid-19 infections remain elevated, which led to the extension of the tough quarantine curbs for Metro Manila and nearby provinces through the first week of September.
It will be a four-day trading week as markets will be closed on august 30 in observance of National heroes Day, a regular holiday in the Philippines.
“In general, the local market has shown bullish momentum in the past two weeks. The sustainability of its rally is at risk next week given the situation in the macro-environment. First, the extension of MECQ [modified enhanced community quarantine] in Metro Manila and in other parts of the country is seen to weigh on sentiment since it is expected to widen our economic losses,” Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financials Inc., said.
“at the same time our daily new Covid-19 cases remain elevated. If the daily new case counts continue with its uptrend next week, then it may put downward pressure on the market.”
Broker 2Tradeasia said that while there’s likelihood that the government may revert Metro Manila and nearby provinces to enhanced community quarantine (ECQ) after the country logged over 18,000 infections per day last week, the targeted lockdowns even at the barangay level may continue to hurt market sentiments.
“The wild card will be the improvement in vaccine rollouts, which are improving outside of Metro Manila, which will have to move to an almost parabolic level to counter arguments of a return to ECQ by the fourth quarter,” it said.
Chartwise, the Psei’s support is seen at 6,600 points and resistance is seen at 6,900 points.
stock picks
Broker regina Capital Development Corp. gave a hold recommendation on the stock of Metro Pacific Investments Corp. (MPIC) as all of its technical indicators point to a buy signal, but at varying strengths.
“Volatility is picking up as well. Therefore, it looks like MPIC would likely remain confined within its thin trading band of P3.79 to P3.91 in the near term.”
Shares of MPIC closed Friday at P3.87 apiece. Meanwhile, the broker gave a buy recommendation on pullback rating on the shares of GT Capital holdings Inc. after it has found its footing to move in an uptrend trajectory after days of consolidating near its 260-day moving average support.
“Buying pressure is spiking. Looking at the charts, investors who wish to get in position could consider doing in an event of a pullback.”
GT Capital shares closed last week at P549.50.
VG Cabuag