Stock Market Outlook – BusinessMirror

Last week 

Share prices fell last week as investors took profits on reports that the United States Federal Reserve supports another 75 basis point increase in its interest rates. 

The benchmark Philippine Stock Exchange index fell 86.65 points to close at 6,606 points. 

Trading, however, was lackluster for the most part of the week as investors were looking for some guidance from both here and abroad. 

Average daily value reached only P4.4 billion, while foreign investors, which made up 44 percent of the trade, were net buyers at P1.16 billion 

All other sub-indices closed in the red, led by the broader All Shares index that fell 42.06 points to close at 3,506.47 points, the Financials index declined 5.54 to 1,606.63, the Industrial index shed 97.51 to 9,828.89, the Holding Firms index retreated 92.82 to 6,365.69, the Property index dropped 50.02 to 2,934.94, the Services index was down 1,677.03 and the Mining and Oil index shrunk 21.72 to 11,622.09. 

For the week, losers edged gainers 144 to 82 and 27 shares were unchanged. 

Top gainers were Acesite (Phils.) Hotel Corp., Chelsea Logistics and Infrastructure Holdings Corp., Abacore Capital Holdings Inc., I-Remit Inc., Manila Broadcasting Co. and Apex Mining Co. Inc. 

Top losers, meanwhile, were Balai ni Fruitas Inc., AllHome Corp., National Reinsurance Corp. of the Philippines, Boulevard Holdings Inc., Berjaya Philippines Inc., LBC Express Holdings Inc. and Zeus Holdings Inc.

This week 

Trading may continue to move sideways this week as investors are still looking for an impetus to trade.

“The market may remain range-bound as drivers to value both off and on shore, are seen to fluctuate over the remainder of the third quarter,” broker 2TradeAsia said. “Quality of assets is underscored here, to reduce the impact of ‘motion sickness’ while the market attempts to base-build.”

Japhet Louis Tantiangco, Philstocks Financials Inc. research manager, said the local market is expected to move sideways with a further testing of the 6,600 level. Investors are expected to take cues from the Philippine peso’s movement against the US dollar, as well as from other significant economic data coming next week. 

“In Friday’s trading, the peso was able to get back above the P57 level, closing at P56.82 per US dollar. A continuation of its recovery momentum is seen to boost sentiment in the stock market. A depreciation is expected to lead to otherwise however,” he said. 

He said investors are also expected to watch out for upcoming OFW remittance, foreign direct investments and balance of payments data for clues on the economy. Lingering worries over the recession risks in the US and in Europe may continue to weigh on the market, Tantiangco said. 

“If the market is able to hold its position at 6,600, this will be considered as its support while its immediate dynamic resistance is seen at the 200-day exponential moving average. If it falls below 6,600 however, it may test its next support at its 50-day exponential moving average.”

Stock picks 

Broker Regina Capital Development Corp. advised to buy when support holds for the stock of Emperador Inc. (EMI) as all its technical indicators are unanimously bullish towards the stock. 

“It can be inferred that its recent price declines are just that of a pullback. Hence, it can be interpreted that some investors are top slicing following EMI’s spike of almost 5 percent last Friday. To give a better illustration, bullish momentum is still present and so does the buying pressure,” it said. 

Emperador shares closed Friday at P20.10 apiece. 

Meanwhile, it advised to buy on breakout on the stock of Ayala Land Inc. (ALI) as after days of moving sideways, its stock has finally staged a rally. 

“Note that at its closing price, ALI is already near its psychological resistance of 030.00. Should the aforementioned resistance get pierced, another one awaits at P31,” it said. 

Ayala Land shares closed last week at P27.80 apiece.  

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