THE Philippine Stock Exchange index (PSEi) is expected to enter a correction this week, with investors likely to cash in gains from the market’s recent run-up to a record 7,800 points.
In its weekly market advisory, AB Capital Securities Inc. said that the market may correct in the next few days after the index succumbed to profit-taking pressure on Thursday and Friday last week.
It expects the index to move within the 7,600 to 7,800 points range.
BPI Asset Management also gave the same trading range forecast for the week, adding that “a slight downward bias” is projected.
“We expect the PSEi to trade range-bound between 7,600 and 7,800 with a slight downward bias as profit-taking and corporate earnings results drive movements within the week,” it said.
Summit Securities Inc. president Harry Liu noted that the market found no strong developments to boost shares late last week, leading to extensive profit-taking on Thursday and Friday following the recent all-time peaks reached despite weakness in some overseas markets.
“The market will continue to consolidate. Profit-taking is likely because of March being the tax month. It’s already the tax month so everybody is preparing their cash positions. If there is sudden positive news, then we can reach 7,800 again,” Liu said.
Despite some expected bumps along the way, the local market should still show robust growth in 2015 and may breach 8,000 points by the yearend on the generally positive economic climate in the Philippines compared to its neighboring economies.
“We have to go through the consolidation. For now, there’s no news that can make the market run up to 7,800. The underlying trend is that long term, it is still upward looking to the 8,000 levels,” Liu said.
“The consolidation is just cyclical every year. Unless there is something new coming that will boost the market, it will be on a consolidation,” he added.
On Friday, the benchmark index dipped 0.44 percent or 33.82 points to 7,730.57, while the All Shares index was off 0.27 percent or 12.08 points at 4,498.61.