Short-term opportunities spotted in finan’l stocks

Sentiments toward the corporate earnings will still ensue over the local stock market but some short-term opportunities have also been spotted in financial stocks.

A&A Securities marketing and research head Justino Calaycay said that for this week, there is a chance that the Philippine Stock Exchange index may break the 7300-resistance line.

Last week, the benchmark settled at 7244.79, closing 10 notches up and 0.13 percent higher week-on-week.

"ADL (Advance-Decline Line) levels over the previous peaks show an improvement in the latter indicating some degree of strength, or at least, resilience. A few of the 'majors' have released fourth quarter numbers and it has been morethan-decent," Calaycay said.

"An earlier report by the BSP (Bangko Sentral ng Pilipinas) on the aggregate performance of banks should be reflected in the individual reports. The Financial Index shows both the absolute index and the 10pdMA (Moving Average) crossing over the 200pdMA 10 days ago. Short-term value flows remains relatively weak and below the averages, however. There could be some short-term action and opportunities in this sector," he then pointed out.

Calaycay proceeded to highlight the financial performance of Bank of the Philippine Islands (BPI), which posted a 21 percent increase in net income, 12 percent in revenue, 9.7 percent in net interest income, 16.7 percent in non-interest income, and 19.2 percent in total loans in 2016.

Moving forward, online brokerage 2TradeAsia.com said locals will continue to monitor the release of corporate earnings from large-caps.

"The international community will also heed for progress in resolving spats in identified industries, especially in honoring the sanctity of contracts in mining and other capital-intensive sectors," the brokerage said. "The latter would be crucial in laying down the framework for the rollout of other infra-based initiatives, especially its impact on employment and foreign direct investments.”