Market to retest 6,000 level

The Philippine stock market sustained its momentum last week as investors factored in the jumbo 75-basis-point rate hike of the Bangko Sentral ng Pilipinas (BSP), which it did to match the hawkish stance of the US Federal Reserve.

The benchmark Philippine Stock Exchange index (PSEi) is now on its fifth consecutive weekly gain, closing at 6,437 or 2.40 percent higher week-on-week, with all sectors rallying led by industrials, services and holding firms.

Stock portal 2TradeAsia said “the PSEi’s technical upward trend remains solidly intact, albeit with a stronger bias toward consolidation.”

It sees immediate support at 6,300 and resistance at the 6,500 to 6,600 levels.

2TradeAsia noted that third quarter results show that companies have performed above expectations, prompting readjustments of estimates.

“So far, 2023 earnings per share is shaking out at a 20 percent growth yearon-year although note that this is core and may change as below-EBITDA lines are disclosed and given more color. Nevertheless, top line growth for 2023 remains exciting despite uncertainties looming over the broader market; we expect some dividend erosion for next year, however, which may slightly open up plays for growth stocks,” it said.

Many companies have reported strongthan-expected third quarter results, translating to double-digit growth for the nine-month period.

Michael Ricafort of Rizal Commercial Banking Corp. said the lower base last year also translated to stronger corporate results for many listed companies.

The lockdowns a year ago “mathematically magnified the year-on-year growth rates of sales and revenues, net income for most listed companies as the economy reopened further toward greater normalcy with no more lockdowns so far this year,” he said.

The PSEi also gained recently amid the relatively stable peso exchange rate at below 59 to the dollar for the eighth straight week or since the last week of September 2022; with the peso now at 57.26, among the strongest in nearly two months or since Sept. 15, 2022, when it closed at 57.16.