Stock-Market Outlook

Last week

Share prices moved up for the sixth straight last week on investor optimism on the prospects for the local currency and the expected slowdown in interest rate hikes.

The benchmark Philippine Stock Exchange index gained 169.56 points to close at 6,606.94 points.

The index retreated on Monday, but it recovered and stayed in the green until the end of the week.

Volume of trade, however, was still depressed, with the average value for the week pegged at P5.54 billion. Foreign investors, who cornered 46 percent of the trades, were net buyers at P2.38 billion.

All other sub-indices ended in the green. The broader All Shares index gained 55.81 points to close at 3,452.44 points, the Financials index rose 65.74 to 1,682.87, the Industrial index climbed 34.30 to 9,519.07, the Holding Firms index surged 205.71 to 6,307.52, the Property index soared 74.92 to 2,920.81, the Services index increased 29.55 to 1,687.91 and the Mining and Oil index was up 4.83 to 9,850.06.

For the week, gainers marginally edged losers 115 to 107 and 19 shares were unchanged.

Top gainers were Easycall Communications Philippines Inc., Now Corp., Republic Glass Corp., Dizon Copper-Silver Mines Inc., Leisure and Resorts World Corp. and City and Land Developers Inc.

Top losers, meanwhile, were AbaCore Capital Holdings Inc., Ferronoux Holdings Inc., Filipino Fund Inc., Manila Bulletin Publishing Corp., AllHome Corp. and Kepwealth Property Phils. Inc.

This week

Share prices may take a breather this week as the market is ripe for profit-taking after six weeks of ascent.

Broker 2TradeAsia said this week will be big for United States market data, which could rouse another round of volatility before yearend. These include the labor and manufacturing data that should impact the US Federal Reserve’s policy meeting on December 14.

“Growth stories have become slightly more compelling in this era, where expectations are low in light of high interest rates plus slower macro growth,” it said.

Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financials Inc., meanwhile, said chart-wise, the local market has been able to maintain its position above the 6,400 level and has gotten past its 200-day exponential moving average last week.

“However, the market has already been rallying for six straight weeks. With this, we may see episodes of profit-taking moving forward,” he said

“The main index may test its resistance at the 6,600 level. Its support is seen at 6,400 points. Investors may take cues from the upcoming bank lending and S&P Global Philippines’ Manufacturing PMI data for clues on the local economy.”

Stock picks

Broker Regina Capital Development Corp. placed a hold recommendation on the stock of Bank of the Philippine Islands (BPI) as market participants looked very undecided whether they should sell BPI while it is still on its strength or buy on low intraday areas.

“The stock ended with a bullish note, and we could assume that the stock still has demand despite climbing for months,” it said.

BPI shares were last traded at P102.10 apiece.

Meanwhile, it gave the same advice on the stock of Ayala Corp. (AC) as it is seeing a good breakout in the next sessions.

“AC just breached its resistance at P609, and from the looks of it, we can potentially see another upswing for this stock in the following days. Volume thickened as demand surged, which is a good sign for its trend,” it said.

“All in all, AC may further move upwards and we suggest holders to hold their position for a little bit longer,” it said.

Ayala’s shares closed Friday at P695 apiece.


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