Market to track eased restrictions, Q3 earnings

ANALYSTS expect the local bourse to take cues from eased quarantine measures, and results of listed firms’ third quarter and nine-month financial reports this trading week.

The bellwether Philippine Stock Exchange index (PSEi) finished the previous week in negative territory as it shed 0.67 percent or 39.86 points to its intraday low of 5,898.47 amid weak market participation on Friday.

Philstocks Financial Inc. research associate Piper Chaucer Tan said the major catalyst for this week’s trading would be the ninemonth and third quarter earnings report by listed corporations, which could give the companies a boost.

Tan added that the market’s movement could also be affected by the recommendations to ease quarantine restrictions and individual market news, as general market sentiment remains uncertain.

He also noted that this is the week before the initial public offering debut of fiber internet provider Converge Information and Communications Technology (ICT) Solutions Inc., which he said might “affect or suck liquidity for the market.”

Converge is set to be listed on the main board on October 26.

Tan has set the trading range from 5,900 to 6,200 for the week.

Research from AAA Equities, on the other hand, sees the market climbing higher amid easing of quarantine measures.

Last week, the government eased both age and travel restrictions as a bid to further reopen the economy.

Under the Inter- Agency Task Force on the Management of Emerging Infectious Diseases Resolution 79, those aged 15 to 65 years old are

now allowed to go out, revising the previous restriction on those below 21 years old and 60 above.

The latest resolution also eases travel restrictions in select places, allowing travel between areas under general community quaran

tine (GCQ) and modified general community quarantine. It also lifts the ban on non-essential outbound travel starting October 21.

Meanwhile, travel agencies and tour operators in areas under GCQ are also allowed to operate at a capacity of 50 percent.

“The recent developments are a major change in the government’s strategy in combating the pandemic as it focuses on spurring economic growth in the fourth quarter,” AAA Equities said.

AAA Equities said the immediate support lies at 5,830, while resistance is at 6,020.

The research also noted the main index might move lower at the beginning of the week towards the support, before moving higher and possibly breaking above the resistance by the end of the week as sentiment improves.