Share prices gained last week after the United States Federal Reserve and the Bangko Sentral ng Pilipinas (BSP) maintained their respective policy rates.
The benchmark Philippine Stock Exchange index (PSEi) rose 16.45 points to close at 6,142.79 points.
The local bourse recovered following a weak start to the week, after the US Fed and the BSP had decided to keep their benchmark policy rates.
“The PSEi briefly broke down below 6,000 before recuperating,” broker 2TradeAsia said.
“The US Fed moved to not move benchmark rates this week (as expected), but reiterated that the rate environment is more than likely to stay elevated, at least until next year -rates sheet imply another rate hike sometime in the fourth quarter, before rate cuts in 2024.”
Average daily trading for the week was still low at P4.2 billion. Foreign investors, who accounted for just 44 percent of the trades, were net sellers at P2.66 billion.
All other subindices ended up mixed. The All Shares index fell 3.23 points to close at 3,316.95, the Financials index rose 1.30 to 1,788.23, the Industrial index added 15.94 to 8,805.82, the Holding Firms index declined 44.37 to 5,814.95, the Property index surged 50.38 to 2,552.97, the Services index was up 6.02 to 1,488.54 and the Mining and Oil index retreated 98.15 to 10,387.46.
For the week, losers edged gainers 132 to 85 and 26 shares were unchanged.
Top gainers were Roxas Holdings Inc., Zeus Holdings Inc., Bank of Commerce, DITO CME Holdings Corp., Atok-Big Wedge Co. Inc., Manulife Financial Corp. and Figaro Coffee Group Inc.
Top losers, meanwhile, were LFM Properties Corp., GEOGRACE Resources Philippines Inc., Mabuhay Holdings Corp., Premium Leisure Corp., Macay Holdings Inc., Manila Bulletin Publishing Corp. and Jackstones Inc.
Share prices may go down this week, mainly on the signal by the US Fed and the BSP that they may increase rates in future meetings.
Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financials Inc., said from a technical perspective, the market is nearing the 6,150 resistance line. Next week, this line could be tested.
“Meanwhile, concerns over the still hawkish outlook of the Federal Reserve and the Bangko Sentral ng Pilipinas are expected to continue weighing on sentiment. This comes as both central banks signaled the possibility of further policy tightening before this year ends,” Tantiangco said.
“There is still room for bargain hunting. However, investors are still expected to look for catalysts that could spur optimism. Without such, getting past the 6,150 resistance line could be difficult.”
For now, Tantiango sees the market trading range at 6,000 to 6,150. “If the market is able to get past and hold ground at the 6,150 line, its next resistance is seen at 6,400.”
2TradeAsia said this week will be the last trading week of the third quarter. Fund managers may be willing to participate as they were on the sidelines for too long.
“The change in the main index’s composition should also bump up volumes in the short term, especially at times like this, where the impact of headlines gets magnified in light of dry, low volume trading session.”
Broker Regina Capital Development Corp. advised to sell on rallies on the stock of Semirara Mining and Power Corp. as the company manages to sustain prices at higher levels despite the current downfall.
“Moving averages are strongly bullish with RSI also at very bullish levels. This can be played by holding or building a position and selling at above P34 levels. SCC remains a good pick as it displays market resilience among other names but it could be a good time to derisk,” it said.
Semirara was last traded at P35.05 apiece.
Meanwhile, it gave the same advise on the stock of Monde Nissin Corp. as it stock price starts to consolidate at the highs with moving averages trying to turn bullish and momentum going back to bullish levels.
“This can be an indication of a possible breakout play as Monde starts to be able to hold prices above its solid resistance. Investors can play this by having a small position that they can quickly add up to and sell when the stock breaks out.”
Monde’s share price P9.17 apiece.