Last week
Share prices fell last week, with the main index dropping to the 6,500-point level, as the renewed hawkishness of the United States Federal Reserve spooked investors.
The benchmark Philippine Stock Exchange index declined by 65.49 points to close at 6,589.88 points.
Prices were marginally up over the first three days of the week, but all of the gains of the main index were wiped out on Thursday when it went down by more than 100 points.
Volume of trade, however, was thin and averaged only P5.55 billion. Foreign investors, who accounted for 41 percent of the trades, were net sellers at P435.31 million.
Most of the sub-indices were down, led by the broader All Shares index that fell 24.03 points to 3,540.39 points, the Financials index was down by a mere 0.65 to 1,835.52, the Industrial index rose 26.88 to 9,582.59, the Holding Firms index declined 161.90 to 6,272.34, the Property index retreated 52.94 to 2,796.55, the Services index was up 20.21 to 1,643.83 and the Mining and Oil index plunged 376.19 to 10,696.70.
For the week, losers led gainers 137 to 76 and 33 shares were unchanged.
Top gainers were Petron Corp., Lorenzo Shipping Corp., 2Go Group Inc., Ginebra San Miguel Inc., I-Remit Inc., Now Corp., Top Frontier Investment Holdings Inc. and Kepwealth Property Phils. Inc.
Top losers, meanwhile, were Dizon Copper-Silver Mines Inc., Concrete Aggregates Corp. A shares, Lepanto Consolidated Mining Co. A and B, Metro Pacific Investments Corp., Arthaland Corp., Premium Leisure Corp., Del Monte Pacific Ltd. and Keppel Philippines Properties Inc.
This week
Share prices are expected to be volatile this week after a series of hawkish comments of US Federal Reserve Chairman Jerome Powell last week.
“Attention will turn to US CPI [consumer price index] print for February. This is likely the final puzzle piece needed to gauge the next (interest) rate change,” broker 2TradeAsia said.
There will be a series of capital-raising activity this month, led by the initial public offerings of Alternergy Holdings Corp. and Upson International Corp. and also the stock rights offer of Philippine Business Bank.
Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financials Inc., said the main index will try to get back to its support price of 6,600 points.
“If the market is able to get back above the said line, then we expect it to resume its trading within the 6,600-6,800 level. If it is unable to do so however, the market may continue to decline with the 6,400 level as its next support,” he said.
“Investors may also take cues from our foreign trade and OFW remittance data for cues. A wider balance of trade deficit and weak remittance data may also weigh on our local currency’s trading which in turn is seen to have negative spillovers on the market,” he said.
Stock picks
Maybank Investment Banking Group has maintained its buy rating on Manila Electric Co. as its income growth for last year was in line with its estimate of P27 billion, a 10 percent increase year-on-year.
“Our 2023 earnings forecasts are unchanged. We raise our 2024 earnings by 12 percent to reflect a higher 2023-24 estimate average distribution tariff of P1.28 and lower MGen’s COGS [cost of goods sold],” it said. Factoring its adjusting revised earnings forecasts, Maybank raised its target price on the stock to P370 and P376.
Meralco’s shares were last traded at P320 apiece on Friday.
Meanwhile, Maybank also maintained its buy rating on the stock of lender BDO Unibank Inc. after its net income of P57 billion last year beat its estimates.
“After its strong earnings momentum, BDO raised its regular dividend to P3 per share from P1.20 per share, implying a dividend yield of 2.4 percent. Its more efficient equity base raises our sustainable ROE [return on equity] forecast,” it said. BDO’s shares closed at P124.20 apiece on Friday.