Last week
Share prices continued to rebound on the quarterly window dressing and the rebalancing of the benchmark Philippine Stock Exchange index (PSEi).
The main index gained 178.45 points to close at 6,321.24 points.
“It was a strong week for the local bourse as it rose by 2.91 percent under a quite strong trading activity relative to the year-to-date average. The market was able to get back above the 6,150 line and even went past the 10-day, 20-day, and 50-day exponential moving averages, which are seen to be bullish signs,” Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financials Inc., said.
“However, it was noticed that the market failed to take the 6,400 level, implying that the said line remains as a resistance.”
Volume of trade was up, hitting an average of P6.18 billion. Foreign investors, who accounted for just 40 percent of the trades, were net sellers at P10.12 billion.
All other sub-indices closed in the green led by the All Shares index that gained 83.88 points to close at 3,400.83 points, the Financials index rose 73.55 to 1,861.78, the Industrial index added 109.84 to 8,915.66, the Holding Firms index surged 218.62 to 6,033.57, the Property index climbed 60.64 to 2,613.61, the Services index was up 19.75 and the Mining and Oil index was higher by 406.63 to 10,794.09.
For the week, gainers led losers 149 to 69 and 36 shares were unchanged.
Top gainers were Asiabest Group International Inc., Top Frontier Investment Holdings Inc., Geograce Resources Philippines Inc., Dito CME Holdings Corp., Imperial Resources Inc., LFM Properties Corp. and Now Corp.
Top losers, meanwhile, were Metro Alliance Holdings and Equities Corp. B, Manila Mining Corp. A and B shares, Paxys Inc., Dizon Copper-Silver Mines Inc., NiHAO Mineral Resources International Inc., Forum Pacific Inc. and Concrete Aggregates Corp. B.
This week
Share prices may not continue its uptrend this week, as investors may go back to trading on the sidelines.
September inflation will be next week’s highlight, at least on the macro side, broker 2TradeAsia said.
“This month’s CPI [consumer price index] will follow July’s 4.7 percent and August’s 5.3 percent This implies September will confirm an uptrend, which is very likely given the BSP’s [Bangko Sentral ng Pilipinas] projected band of 5.8 percent for the year.”
It added that inflation risk is still tilted to the downside given persistent supply shocks, energy and transport costs and seasonal demand-pull inflation.
“Base-case hikes on the November and December meetings of 25 basis points each will put the policy rate to 6.75 percent by the end of 2023; while this explains the observable lack of excitement on the ground, better for investors to price this off now, especially as the PSEi rebalancing has made the index more cyclical and consumer-oriented,” it said.
Tantiangco said investors are also expected to watch out for the upcoming S&P Global Philippines Manufacturing PMI and labor market data for clues on the health of the local economy.
“Offshore, investors are expected to take cues from the developments in the US government, particularly their budget issue. If a US government shutdown happens amid the lack of a budget agreement, it may weigh on market sentiment,” he said.
Chartwise, the market’s trading range is seen from 6,150 to 6,400 with a possible further testing of the resistance. If the market is able to get past 6,400, its next resistance is seen at 6,600, he said.
Stock picks
Maybank Securities has maintained a buy rating on Shakey’s Pizza Asia Ventures Inc. as its first-half income was in line with its estimates.
“Factoring in a higher average revenue per store, increase in higher-margin dine-in sales, effective cost management, we raise our fiscal year 2023 and 2024 earnings forecast by 11 percent and 12 percent, respectively to P1.1 billion and P1.3 billion, which translates to a higher target price of P12,” it said.
Shakey’s share price closed on Friday at P9.30 apiece.
Meanwhile, it gave a buy rating on the stock of Cebu Air Inc., the operator of Cebu Pacific (CEB) airline.
“We forecast (this year’s) net income to reach P6.1 billion, a turnaround from 2022’s P14 billion in net losses as we expect a 34 percent to 35 percent year-on-year increase in number of flights and passenger volume as travel demand rises. At this rate, we forecast CEB’s earnings to exceed pre-pandemic levels by year-end 2025. Key risks include rising fuel costs and a weakening Philippine peso versus the US dollar.
Cebu Pacific’s share price closed last week at P34 apiece.
