Mar­ket may fi­nally break past 8,000 this week

The Philippine Star - - BUSINESS - By IRIS GON­ZA­LES

The stock mar­ket may try to break past the 8,000 bar­rier this week fol­low­ing last week’s strong per­for­mance, an­a­lysts said.

The stock mar­ket en­joyed strong days last week ex­cept at the tail end when some in­vestors were spooked by news that ship­builder Han­jin has gone bank­rupt with loans of roughly $400 mil­lion owed to lo­cal banks.

Still, the bench­mark Philip­pine Stock Ex­change in­dex (PSEi), the lo­cal stock mar­ket barom­e­ter, ral­lied by 1.84 per­cent week on week to set­tle at 7,904.09.

Traders said in­vestors placed their bets on Philip­pine equities amid ex­pec­ta­tions of cool­ing in­fla­tion and Wall Street’s volatil­ity.

“In­vestors are buy­ing blue chips that will ben­e­fit from a pos­si­ble re­ver­sal of for­eign in­flows and po­si­tion­ing in stocks that will gain as in­fla­tion eases,” said Jonathan Rave­las, chief mar­ket strate­gist at BDO.

How­ever, dur­ing the lat­ter part of the week on Fri­day, the mar­ket fin­ished in the red. Some profit tak­ing oc­curred to­ward the end of the trad­ing week af­ter lo­cal unit of ship­builder Han­jin asked its cred­i­tors to re­struc­ture its more than $400 mil­lion debt.

Nev­er­the­less, Rave­las said the week’s close at 7,904.09 means the mar­ket still has the mo­men­tum to try the 8,000 lev­els, as it al­ready touched the 7,992.33 in­tra-week high.

In­vestors, he said, should look for an­other as­sault to­ward the 8,000 level. How­ever, fail­ure to clear the 8,000 level could trig­ger some profit tak­ing back to­ward the 7,500 level.

In all, the mar­ket is likely to breach the 8,000 mark within the quar­ter, said Harry Liu, pres­i­dent of Sum­mit Se­cu­ri­ties Inc.

He said this would have a lot to do with cool­ing in­fla­tion and the steady eco­nomic growth of both the US and the Philip­pines.

Last week’s turnover amounted to P43.22 bil­lion, while for­eign net buy­ing was at P4.47 bil­lion.

In all, the PSEi is cur­rently up al­most six per­cent for the month.

This week, the mar­ket can go ei­ther way, but breach­ing the 8,000 mark so soon may be too op­ti­mistic.

For F. Yap Se­cu­ri­ties, im­me­di­ate sup­port is seen at 7,700 to 7,800 and re­sis­tance at 8,000 to 8.050.

Piper Chaucer Tan of Phil­stocks Fi­nan­cials said the mar­ket may still con­tinue its rally given the up­side to Philip­pine shares which have been se­verely bat­tered the past year.

“We are still up­beat and the 8,000 level might come sooner than later,” Tan said.

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