PH SHARES WEEKLY OUTLOOK

Earnings season to temper market’s downward bias

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After steadily losing ground last week, the Philippine Stock Exchange index (PSEi) is expected to move on a downward bias for the next few days, although corporate earnings for the first half and positive economic indicators from overseas should help bolster sentiment and limit losses.

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Joyce Anne Ramos, equity analyst at AB Capital Securities, said in a weekly market report that while a negative slant is projected over the short term, any positive earnings results and the release of positive indicators overseas could quickly turn sentiment around.

At this point, she said it is best for investors to hunt for bargains while waiting for fresh incentives.

“While we await the domestic corporate earnings season, we advise investors to hunt for bargain stocks, take cautious positions, and range trade as the market may resume the retesting of 7,000 [points]should the earnings [results]be positive,” Ramos said.

However, she added that the main index “may breach the support at 6,800 to revisit 6,700 should global sentiment continue to worsen.”

“Notable economic updates to be expected next week are US new and existing home sales, inflation, and durable goods orders, China’s manufacturing gauge, and Japan’s inflation,” she added.

The market saw moderate losses last week amid a raft of negative leads—Typhoon Glenda lashing the country midweek, the corruption issue surrounding the government’s Disbursement Acceleration Program, President Aquino’s faltering performance ratings, and the shooting down of Malaysia Airlines flight MH17 over Ukraine airspace.

Analysts earlier said the local market is expected to move on a downward but consolidative flow for the short and medium term, with the effect of the MH17 tragedy dragging possibly until this week.

But for longer term, the benchmark index is projected to recover its upward bias.

On Friday, the PSEi went down 14.29 points or 0.21 percent to 6,853.07, while the All Shares index also dipped 6.21 points or 0.15 percent to 4,106.37.

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