Market waiting on Q1 earnings signals


Stock market investors are likely to remain on the sidelines for most of this week as they await the first quarter results of listed companies, as well as key economic data from the US and Japan.

Astro del Castillo, president and managing director of First Grade Finance Inc., said that for the week, investors are expected to stay on the sidelines as they watch for net income results of major listed corporations.

“The market is expected to move just sideways this week pending the first quarter performance report of various companies. So long as these fiscal performance reports are aligned with market expectations, the main index is expected to shoot up thereafter,” del Castillo said.

Last week, the benchmark Philippine Stock Exchange Index (PSEi) retreated by 0.90 percent or 66 points week-on-week to close the week at 7,255, 39.

The services sector had the largest setback losing 1.89 percent, followed by industrial firms shedding 1.21 percent.

Average total value turn over weakened by 14 percent to P5.74 million, with losers outnumbering winners, 102 to 83.

During last week, foreigners remained net sellers, dumping P941 million worth of shares. Tuesday was the fourth-highest day in terms of capital outflows so far this year at P706 million.

Meanwhile, Jonathan Latuja, equity research analyst at Unicapital Securities Inc., agreed with del Castillo with regard to investors awaiting the first quarter earnings results of the biggest listed corporations.

But Latuja also pointed out that the market is likewise anticipating the separate announcements of the US Federal Reserve and the Bank of Japan on their respective policy decisions, along with crucial data such as the first-quarter US gross domestic product result and Japanese inflation.

“In anticipation of these events, investors would stay at the sidelines,” Latuja said.

Finally, AB Capital Securities Inc. in a note said that the PSEi is expected to continue trading sideways up to the elections on May 9.

“Uncertainty in the election’s outcome keeps investors risk-off, as there is a lack of market clarity in terms of how the second half of the year would play out,” AB Capital said.


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