Stock Market Outlook: October 6, 2014

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Last Week

SHARE prices slightly fell during the week partly as a result of mixed news both here and abroad, but the main index was able to climb back to the 7,200-point level.

The benchmark Philippine Stock Exchange index dropped 14.27 points to close the week at 7,247.03 points, while the rest of the subindices ended mixed. Investors’s negative sentiments were influenced by the ongoing protests in Hong Kong, which houses the world’s fifth largest bourse.

At home, investors bought shares during the traditional end-of-the-quarter window-dressing of firms, but overseas sentiment weighed on their decision. Turnover slid by 3 percent week-on-week to P8.97 billion, while foreign investors were net buyers at P920.1 million, despite selling Philippine stocks almost all weeklong after they accumulated more than P3 billion of net-buying activity on Monday.

Losers edged gainers 104 to 74.

Other subindices ended mixed. The broader All Shares index dropped 24.36 points to 4,277.09, the Financials index gained 12.78 to 1,706.75, the Industrial index surged 169.31 to 11,570.77, the Holding Firms index rose 27.10 to 6,401.51, the Property index shed 31.50 to 2,820.94, the Services index lost 65.36 to 2,112.35 and the Mining and Oil index plunged 980.77 to 16,699.25.



This Week

ANALYSTS said that the main index may likely further consolidate this week, with the main index possibly build a strong base in time for the seasonal run-up at the end of the year. This week is a shortened work-week as Monday was declared a public holiday in observance of Eidul Adha (Feast of Sacrifice) for the Muslims. Jason Escartin, equity analyst at F. Yap Securities Inc., placed the main index support level at 7,150 and resistance between 7,270 and 7,330 points.

“Sectors that were aggressively downtrodden by the sell-off might go through relief rallies especially large-cap telcos,” Escartin said.

He said energy-related shares and property might also be favored by investors in light of demand prospects for 2015 and also remittance growth for the fourth quarter of the year.



Stock Picks

BROKER Regina Capital recommend to sell Robinsons Retail Holdings Inc. of the Gokongwei family after the stock broke its eight-month support level. The broker said that the stock may slide further to P57.50, while its technical readings were bearish and it is expecting the stock to correct further.

“In case of rebounds, we also advise selling on rallies,” the broker said. Robinsons Retail closed on Friday at P61.40.

Bank of the Philippine Islands (BPI) is also currently in its correction phase and is expected to test its new support level of P97. Regina Capital said that buying pressure will be at its strongest upon reaching the level. It recommend to buy when its support level holds and it placed a target price on the stock at P101 per share.

BPI ended the week at P99 per share.



VG Cabuag

A journalism graduate and has covered the Philippine business beat for more than a decade.