Stock-market OUTLOOK

Last week

Share prices fell last week on sideways trading, as investors digested the possibility that the United States Federal reserve will tighten its rates soon.

The benchmark Philippine Stock exchange index lost 41.55 points to close at 7,251.97 points.

The main index was mostly down throughout the week, but trading was higher at an average of P5.97 billion.

Foreign investors, which accounted for only a little over a third of total trades, were net sellers at P1.46 billion.

Other sub-indices ended mostly in the red, led by the all Shares index that fell 13.32 points to close at 3,856.08 points, the Financials index gained 35.95 to 1,694.89, the Industrial index rose 200.83 to 10,616.98, the holding Firms index declined 127.07 to 7,063.07, the Property index retreated 52.45 to 3,216, the Services index shed 20.15 to 1,952.96 and the Mining and Oil index plunged 341.86 to 10,189.02.

For the week, losers edged gainers 162 to 61 and 26 shares were unchanged.

Top gainers were Keppel Philippines holdings Inc. B shares, ATN holdings Inc. a and B shares, Solar Philippines Nueva ecija Corp., MJC Investments Corp., emperador Inc. and Figaro Coffee Group Inc.

Top losers, meanwhile, were Xurpas Inc., ABS-CBN Corp., Macay holdings Inc., haus Talk Inc., Merrymart Consumer Corp. and Greenergy holdings Inc.

this week

Share prices may rise this week after the government decided to lower the alert level classification for Metro Manila starting February.

Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financials Inc., said the local market will take cues from the government’s decision on the alert levels to be implemented in the country by February 1.

“So far, signs of improvement have been seen in the Covid-19 situation of the country, primarily in the National Capital region. If this leads to the easing of restrictions, then it is expected to give market sentiment a boost,” Tantiangco said.

The government decided to lower the classification of Metro Manila and nearby provinces of Bulacan, Cavite and rizal to alert Level 2 over the weekend.

“easing of restrictions is seen to help in keeping our economy in its recovery track. Concerns over the monetary tightening in the US this year may continue to weigh on the market however especially as the Federal reserve has already given hawkish signals in their recent policy meeting. aside from these, the market may take cues from the upcoming IHS Markit Philippines Manufacturing PMI and Inflation data for the month of January.”

It will be a four-day trading week as February 1 is a holiday for the Chinese New Year celebration.

Broker 2Tradeasia said investors will be glued this week on earnings releases of the ayala Group, such as Bank of the Philippine Islands and Globe Telecom Inc. by next week.

Chartwise, the local market’s initial support is seen at its 50-day exponential moving average 7,205.41 as of January 28. Its resistance remains at 7,300, Tantiangco said.

stock picks

Broker regina Capital Development Corp. advised to trade the range on the shares of PLDT Inc. (TEL) but said its share price now “looks prime for picking at these levels”.

“For one, it is still trading within its consolidation range despite the past few days of downturn. For another, it is now at the lower band of said range, which most would typically consider a good entry point. For range-traders, TEL is all the more attractive at this point, given its range-bound nature. Its indicators are also all supportive of further sideways movement,” it said.

PLDT shares closed Friday at P1,869.

Meanwhile, the broker advised to hold the shares of ac energy Corp. (acen) as the past few trading sessions have been its most stable range since the fourth quarter.

“The stock has been stuck in consolidation between a very thin spread of P9.50 to P9.80. Indicators are neutral but showing a slight downward bias. It seems like acen is trading at market weight now as it continues to carefully flirt with its 200-day moving average. any level below this would be a good entry point, if acen’s performance between Jan 10 to 14 is anything to go by.”

ac energy shares closed last week at P9.49. VG Cabuag