Philippine shares are poised to gather new momentum after having established firmer support in a holiday-shortened week marked by negative global leads last week.
The Philippine Stock Exchange index (PSEi) is likely to trade on a more positive note, with investors on the lookout for bargain stocks after the benchmark index dropped to the 7,300-point level last week, BPI Asset Management said in a weekly market review.
“We expect the PSEi to trade rangebound between 7,420 and 7,600, with an upward bias, the BPI unit said, citing the likelihood more bargain hunting after weeks of persistent selling.
“Movements will be strongly influenced by local corporate news and global economic data releases,” it added.
Justino Calaycay Jr., analyst at Accord Capital Equities Corp., said Philippine equities are “unlikely” to show a significant shift in sentiment this week, following a long weekend spurred by Independence Day on Friday.
“It is unlikely that the mood of investors will show a significant change when trades resume on Monday following an extended weekend . . . The main question that will preoccupy investors will revolve around the sustainability of the immediately preceding two-day advance which snapped a four-session slump,” Calaycay said.
“So far, the index has moved consistent with the theoretical suggestions following a head-and-shoulders pattern completion. Although it fell past the 7,300 to 7,320 points measured pull-back target, it managed to rebound above the line in ensuing trades with Thursday’s action pushing it back to the 7500 levels,” he added.
In closing the four-day work week, the bellwether PSEi surged by 119.45 points or 1.62 percent to 7,503.72 on Thursday. The broader All Shares gained 60.03 points or 1.41 percent to 4,314.24.
However, Jason Escartin, investment analyst at online brokerage firm 2TradeAsia.com, sees a soft market with thin trades prevailing this week, noting that investors are cautious and picky in view of the US rate hike.
“As long as the specter of a rate hike hangs over the heads of traders, fund managers may continue to stay selective in their trades without any general stance on the market,” Escartin said.
He said the benchmark stock index is likely to trade within the 200-point range of 7,400 to 7,600.