Last week
Share prices fell last week, with the main index returning to the 6,500-point level, as profit-taking ensued during most of the sessions mainly due to the uncertain outcome of the United States’ debt ceiling issue.
The benchmark Philippine Stock Exchange (PSE) index fell 2 percent or 134.35 points to 6,530.20 points. The main index was down almost all week long, except on Wednesday, when it gained a measly 12.39 points.
Volume of trade was depressed at it averaged only P3.95 billion for the week. Foreign investors, who cornered 46 percent of the trades, were net buyers at P2.38 billion.
All other sub-indices ended in the red, led by the broader All Shares index that fell 60.29 points to close at 3,488.08 points, the Financials index lost 63.39 to 1,815.67, the Industrial index declined 157.56 to 9,343.16, the Holding Firms index retreated 73.90 to 6,539.36, the Property index was down 52.75 to 2,703.45, the Services index plunged 51.07 to 1,525.88 and the Mining and Oil index shed 221.71 to 10,075.11.
For the week, losers outnumbered gainers 154 to 63 and 34 shares were unchanged.
Top gainers were Ionics Inc., Kepwealth Property Phils. Inc., Petron Corp., Asiabest Group International Inc., Manila Broadcasting Co., Jackstones Inc. and Premium Leisure Corp.
Top losers, meanwhile, were Prime Media Holdings Inc., Megawide Construction Corp., Apollo Global Capital Inc., Filinvest REIT Corp., Easycall Communications Philippines Inc., Anchor Land Holdings Inc. and PXP Energy Corp.
This week
Share prices may go up this week, but this is mainly due to bargain hunting as many analysts expect volatile trading as the market will continue to monitor the developments related to the US debt ceiling deal.
Juan Paolo Colet, managing director at China Bank Capital Corp., said the surge in US stock indices last Friday and growing optimism about US debt limit talks could encourage bargain hunting when the PSE opens.
“Investors should expect elevated volatility as several factors come into play, including developments in Washington, end of month window dressing, and completion of the MSCI rebalancing,” he said. “Positive news on the US debt ceiling would be the most likely catalyst for a market rally that could send our local index well above 6,600.”
Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financials Inc., said based on the latest developments, according to US Bureau of Treasury Secretary Janet Yellen, June 5 is now the new date when Washington could start to default on its debts if the ceiling is not raised.
“If the two camps of the US government strike a deal next week, then it is expected to spur positive sentiment which in turn may lead to a bounce back for the local bourse. If not however, the local market may extend its decline.”
For now, he sees the local bourse’s support at 6,400 points, while resistance is seen at 6,600 points.
Stock picks
Maybank Securities has maintained its positive view on the Philippine gaming sector following first quarter results, which showed sustained industry gross gaming revenue (GGR) growth of 107 percent year-on-year.
Entertainment City in Paranaque and Clark’s GGR are trending significantly above 2019 levels and outpacing the growth of state-run casinos.
“Our top pick, Bloomberry Resorts Corp. remains the market leader in Entertainment City, with a first quarter GGR share of 35 percent,” it said. “We reiterate our buy on BLOOM, whose estimates and target price we recently upgraded after its big results beat in first quarter.”
It said Bloomberry’s market leadership in mass tables and slot machines in Entertainment City is more apparent in the mass market, with its share in mass and slots GGR at a higher 37 percent. The next largest player, Okada Manila, has a 27-percent share in the mass market.
Bloomberry’s shares closed at P10.96 apiece.
Meanwhile, it gave a buy rating on the shares of First Gen Corp. (Fgen) after its first quarter income was ahead of consensus estimates.
“As such, we raise our 2023/2024 earnings estimates by 23 percent and 32 percent, which raises our target price by 5 percent to P29.30. Our higher earnings forecasts and TP also includes the acquisition of 165MW Casecnan Hydroelectric power plant for P29.3 billion, which we expect to financially close by July.”
Fgen’s shares closed last week at P19.50 apiece.
