SHARE prices rose last week, with the main index returning to the 6,600-point level, as investors found reprieve following a dovish tone from the US Federal Reserve.
The benchmark Philippine Stock Exchange index gained 132.45 points to close at 6,602.17.
The main index was up three of the five trading days, but it was down when the policy-making Monetary Board of the Bangko Sentral ng Pilipinas raised its rates by 25 basis points. The BSP mirrored the US Federal Reserve’s move of raising its rates during the week.
Volume of trade, however, was anemic, averaging only at P4.05 billion. Foreign investors, who accounted for half of the trades, were net buyers at P219.55 million.
All other sub-indices ended on the green, led by the broader All Shares index that closed higher by 52.45 points to close at 3,516.72 points; the Financials index was up by mere 0.74 to 1,795.08; the Industrial index rose 157.77 to 9,511.72; the Holding Firms index added 110.88 to 6,421.58; the Property index climbed 73.85 to 2,782.02; the Services index surged 71.07 to 1,638.45 and the Mining and Oil index gained 163.06 to 10,674.37.
For the week, gainers led losers 125 to 91 and 30 shares were unchanged.
Top gainers were Lorenzo Shipping Corp., Anglo Philippine Holdings Corp., Manila Water Co. Inc., Easycall Communications Philippines Inc., Lepanto Consolidated Mining Co. A and B shares, LBC Express Holdings Inc. and House of Investments Inc.
Top losers, on the other hand, were Ionics Inc., PH Resorts Group Holdings Inc., Manila Broadcasting Co., Macay Holdings Inc., MJC Investments Corp., iPeople Inc. and Victorias Milling Co. Inc.
SHARE prices may move higher this week following signs that the US Fed will ease its rates sooner than expected.
Broker 2TradeAsia said despite cues for a pivot, initially to cut rates late 2023 to now at early 2023, it maintained cautious of inflation-interest rate movements in the medium term as drivers have yet to go down.
“This is especially true for unique local drivers. For instance, ambient temperatures starting to go up in time for summer are expected to bring energy inflation higher, and fiscal intervention on the agri supply side has yet to significantly impact shelf prices such as sugar still close to peak despite import allowance,” the broker said.
Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financials Inc., said the market may test the 6,600-point level. If it is able to hold its position at such line, this will become its support while its next resistance would be at 6,800. On the other hand, failure to do so would bring the market back to its 6,400 to 6,600 trading range, he said.
“The lingering offshore banking concerns are still expected to weigh on sentiment. Investors are expected to watch out for developments with respect to it. On a positive note, the banking concerns and the risks they bring to both local and global economic prospects may also fuel hopes that the BSP and the Federal Reserve will end their monetary tightening soon. This in turn may help the market,” he said.
MAYBANK Investment Banking Group has given a buy rating on the stock of chemical manufacturer D and L Industries Inc. as it can pass on cost to its customers, which continues to be its key advantage amid this high inflationary environment.
DNL’s share price has underperformed against PSEi, after reaching a 52-week high in early February.
“On top of DNL’s sustained market leadership in its key segments and strong price pass-through mechanism, the margin windfalls from stabilizing raw material prices in the fourth quarter should make our fourth quarter of 2022 earnings forecast of P505 million realizable,” it said.
This translates to earnings of P3 billion or a 15-percent increase from the previous year.
Share price of DNL closed last week at P7.65. The bank gave a target price on the stock at P10 per share.
Meanwhile, Maybank gave the same buy advise on the stock of International Container Terminal Services Inc. (ICTSA) after its net income last year came ahead of its consensus estimates.
“The beat was a result of higher-than-expected volume growth at 9 percent and higher yield per TEU (20-foot equivalent unit) at $183 per TEU. We raise our 2023/2024 net income forecasts by 14 percent and 16 percent, respectively, to account for higher volume forecasts. Maintain buy (rating) given attractive upside and high expected dividend yield,” the bank said.
ICTSI’s shares closed Friday at P213.20. Maybank placed a 12-month target price on the stock at P240 apiece.