LAST WEEK
SHARE prices ended lower this week, with investors deciding to sell after six straight days of gain.
After breaching a week high of 7,176, the benchmark Philippine Stock Exchange index (PSEi) closed lower by 82 points to 7,050.89 points, down by 1.15 percent.
The market declined despite the announcement that the country’s economy, as measured by the gross domestic product, grew to 6.4 percent in the second quarter, much faster than the previous quarter but lower compared with last year’s figure.
Overseas, the US durable goods orders for August grew 23 percent, while consumer confidence was up at 92.4, but fighting in eastern Ukraine between government forces and pro-Russian rebels continued despite the meeting between Russian and Ukrainian leaders in Belarus.
Net foreign buying was at P2 billion, while losers beat winners at 99 to 76.
Among the subindices, the Mining and Oil index advanced 2 percent to 17,603.15 and the Services index gained 0.82 percent to 2,237.16, while all others declined. The All Shares index fell 1.13 percent to 4,170.01; the Financials index declined 1.32 percent to 1,625.82; the Industrial index lost 1.8 percent to 10,784.75; the Holding Firms index declined 2.07 percent to 6,150.12; and the Properties index gave up 0.7 percent to 2,676.33.
THIS WEEK
SHARE prices may further drop this week as there are no market-moving news for investors to buy. Astro del Castillo, managing director of First Grade Finance Inc., said the main index may test the 7,000 level, and there is a possibility that it may go down further to the 6,900-point level or even below as part of its consolidation mode.
“The market is poised for consolidation given the six days of run. The market-moving news is already drying up and the market is already on the high-end of the price. It is best for the market for a pause,” del Castillo said.
Jason Escartin, analyst at F. Yap Securities Inc., said some investors may have concerns over price-earnings valuations, but many fund managers are already thinking of buying for next year’s prospects.
“Mergers and acquisitions, as well as partnerships, are already being considered to traverse high-growth markets, including advantages from operational and supply-chain synergies,” Escartin said.
He placed PSEi’s support level at 7,000, and resistance level at 7,150 and 7,200 points.
STOCK PICKS
BROKER Regina Capital gave a buy rating on Cebu Air Inc., the operator of budget airline Cebu Pacific, after its price seemed to have bottomed out last year.
“Cebu Air’s prospects have greatly improved with the lifting of the US and European Union bans, as they open up more revenue opportunities for [the company],” the broker said.
It gave Cebu Air’s target price at P71.30 as against the stock’s closing price on Friday at P63.
The broker recommended to take caution on Robinsons Retail Holdings Inc., another Gokongwei-controlled firm, as its technical analysis showed that the price may drop in the coming days. Robinsons Retail support price of P62.17 needs to hold first before it can trigger a buy, it said.
The broker gave a target price at consolidation resistance of P73.02. The stock closed higher at P62.70 last week.
Meanwhile, the broker said the stock price of Security Bank Corp. is already trading near its resistance level of P129 per share and its technical analysis showed that there might be a medium-term upside. It recommended to buy on breakout of the stock and gave a target price of P138.50. Security Bank closed higher on Friday at P127. VG Cabuag
