Last week
Share prices surged during the first trading week of the year, with the main index closing beyond 6,600 points.
The benchmark Philippine Stock Exchange index gained 179.60 points to close at 6,629.64 points.
The main index lost only once during the four-day trading week, as December inflation, which came in at 3.9 percent, was well within the Bangko Sentral ng Pilipinas’ band of 3.6 percent to 4.4 percent. This brought the full year 2023 inflation rate to 6 percent.
“Admittedly this came stronger than expected, given seasonal demand and volatility-related downside risks,” broker 2TradeAsia said.
Average daily trading was still weak and was valued at P3.65 billion. There was a trading halt on Tuesday, which the was caused by the mobile trading application and its process of authenticating all accounts, according to the PSE.
The PSE implemented the trading halt last January 3, from 9:32 a.m. to 11:55 a.m.
The technical problem encountered was the inability of at least one-third of the trading participants to connect to PSE’s front-end order management system and for some of these TPs, the inability to send orders to the trading system.
Foreign investors, who cornered only 45 percent of the trades, were net buyers at P1.37 billion.
All other sub-indices ended in the green, with the exception of the Mining and Oil index that fell 223.02 points to close at 9,777.41 points.
The broader All Shares index was up 77.93 to 3,502.52, the Financials index rose 35.83 to 1,774.71, the Industrial index increased 166.40 to 9,242.31, the Holding Firms index surged 314.27 to 6,420.27, the Property index gained 19.44 to 2,874.38 and the Services index climbed 43.83 to 1,648.82.
For the week, gainers edged losers 141 to 76 and 26 shares were unchanged.
Top gainers were Anchor Land Holdings Inc., Paxys Inc., Concrete Aggregates Corp. A shares, AbaCore Capital Holdings Inc., Xurpas Inc., NiHAO Mineral Resources International Inc. and Philippine Realty and Holdings Corp.
Top losers, meanwhile, were Jolliville Holdings Corp., Concrete Aggregates Corp. B, Roxas Holdings Inc., Dizon Copper-Silver Mines Inc., Global-Estate Resorts Inc., Roxas and Co. Inc. and Pacific Online Systems Corp.
This week
Share prices may go down this week as investors may pocket the gains they made during the New Year.
Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financials Inc., said to sustain the momentum, the market will need more “positive catalysts.”
“While the decline of inflation last December is seen to have helped in lifting sentiment, investors are still expected to look further, primarily how the inflation trend and the BSP’s policy path will be this year. Thus, investors are expected to look for clues on inflation and monetary policy outlook,” he said.
Next week, investors may also watch out for our the upcoming labor market and foreign direct investments data.
“Without positive catalysts, the local market may pull back next week on profit taking,” he said.
2TradeAsia said eyes will next be on US inflation to be announced this week. The Federal Reserve minutes alluded to likely rate cuts sometime this year, but with an uncertain cadence and rate of change.
“Overly restrictive policy has been floated and will likely be the point of tension for markets for the first half of 2024, considering recessionary fears albeit milder than 2022/23 and heightened geopolitical stress in key economies, including US election looming in the second half,” the broker said.
“In other words, a new easing cycle this year seems to be more of an eventuality instead of a myth, and therefore brace for global funds’ asset class reallocation in anticipation of this shift in premiums, equities being primary beneficiaries.”
Immediate support is seen at 6,500 points, while resistance is from 6,700 to 6,750.
Stock picks
Broker COL Financials Inc. gave a buy rating on D&L Industries Inc., with a fair value estimate at P9.70 per share.
“We expect that the recovery in overall business activity should result in a more favorable sales mix for D&L and drive margin expansion over the long-term. We also believe the company’s long-term growth prospects remain attractive and expect that the significant capacity expansion from its new Batangas facility will allow D&L to scale its export business.”
D&L’s share price closed last week at P6.55 apiece.
Broker Regina Capital Development Corp. advised investors to buy on pullbacks on the stock of Aboitiz Equity Ventures Inc. as after it gained more than 11 percent.
“Nonetheless, the spike in price was supported by an above average buying volume. Hence, wait for a possible pullback in price as the upward momentum may likely be sustained at least for a few more trading days,” it said.
AEV shares closed Friday at P48.90 apiece.