Market to trade slower ahead of Holy Week break

TRADING at the local stock market this week is expected to be slower as most investors look forward to the Holy Week holiday break.

According to the weekly market outlook of 2TradeAsia. com analyst Freya Natividad, slower sessions are expected for this week, as trading activity might thin while local and foreign investors take a leave for the Lenten season.

“Long-term players are likely to seize this lull to position, in anticipation of improved local prospects for the initial quarter of the year. Moreover, strong support appears visible at 6,400 [points], as this is still within the PSEi’s [Philippine Stock Exchange index] ascending channel,” she said.

“Check on lead sectors and aim for good trading ranges in preferred bets,” Natividad added.

On the other significant factors that may affect the market this week, Natividad said that the Cyprus bailout issue may remain to be in the spotlight.

She took note that the European Central Bank gave an ultimatum yesterday to Cyprus to arrive on a bailout plan, with the European Union and the International Monetary Fund. Otherwise, Cyprus would be prevented from accessing emergency funds from the Emergency Liquidity Assistance (ELA).

Natividad said that Cyprus officials have yet to resolve their impasse in adopting a conditioned tax on bank deposits, which was among the conditions for the bailout package.

“We believe such option might be supported by Cyprus policy makers, in the absence of other choices. The earlier perceived stigma of potential ‘ripple-effect’ has already been discounted into prices, as investors are more able to look on Cyprus’ overall impact on the euro block,” she said.

In the previous week, the PSEi slumped 135 points at 6,518, or less than 2 percent week-on-week even if ended positively flat during the last two days of the week.

The benchmark index was dragged by the losses incurred by holdings (3.9 percent) and property (-2.7 percent). Turnover also decreased 16 percent to P10.554 billion on average, while market breadth skewed in favor of the bears, 91-69.

For this week, immediate support is 6,450 points, and resistance 6,570 to 6,600.