Earnings announcements by listed firms will be a factor in how the stock market performs this week, analysts said, but investors will also be looking for fresh economic news from the United States and China.
“Earnings season for the fourth quarter would drive the stock market’s direction for the week. So far, those who have reported … have announced incomes that are in line with prior estimates,” said Lexter Azurin, head of equity research at Unicapital Securities Inc.
Among the companies that will be announcing their earnings results are Philippine Long Distance Telephone Co. and BDO Unibank Inc.
With regard to global oil prices, Azurin noted that unless there are significant movements, the local bourse is unlikely to be adversely affected.
Last Friday, the benchmark Philippine Stock Exchange Index was basically unchanged as it picked up by just 0.03 percent or 2.04 points to close at 6,771.30. The wider All Shares also marginally rose, by 0.11 percent or 4.18 points to 3,905.76.
Victor Felix, analyst at AB Capital Securities, agreed with Azurin that the earnings season would affect how the stock market performed this week but added that cues would also be taken from expected data releases from China and the US.
“[T]hese data could give the market an upswing should there be any good news. With respect to oil prices, it remains a big factor as it primarily determined the market last week,” Felix said.
Jason Escartin, investment analyst at 2TradeAsia.com said the absence of a compelling bearish case would not stop investors from locking in gains and staying on the sidelines.
“Widespread pessimism is an opportunity for astute stock pickers, as optimism will be highly selective amid the local earnings season. After all, 2016 is not shaping up to be a year that sees a rising tide lifting all boats,” Escartin said.