Analysts see market tracking earnings trend, Greece-EU talks
After setting a 13th record high for this year earlier this week, Philippine shares are expected to resume trade Friday with upbeat sentiment amid the Lunar New Year celebrations tempered by profit-taking.
Justino Calaycay Jr. of Accord Capital Equities Corp. said the new highs need to be “tested and validated in the coming days,” noting that investors might be looking to book profits from the previous PSEi advances.
Joyce Ramos, investment analyst at AB Capital Securities Inc., said some investors are likely to cash in on their gains from the three-day winning streak of the market, since the PSEi has crossed the 7,800-points psychological resistance level.
Trading was suspended Thursday for the holiday.
The Philippine Stock Exchange index (PSEi) finished Wednesday’s trade in record territory on the positive turn of Greek bailout negotiations. The benchmark index ended at an all-time closing high of 7,803.45, after reaching an intraday peak of 7,840.39.
“As we still await significant domestic catalysts such as the release of corporate earnings results and announcements of dividend payments, and as the index has already closed above the psychological resistance at 7,800, we see room for possible profit-taking,” Ramos said.
“We peg support at 7,770, while the next resistance level is at 7,850. We continue to encourage investors to buy on dips and sell on rallies,” she added.
Besides corporate earnings, the market will also track developments overseas, which
have been mostly positive such as indications Greece will settle for an extension of its loan package with the EU. Analysts also viewed expectations that oil prices could recover and return to $60 per barrel as positive drivers of the market.
Calaycay said the market saw trade volumes thinning the past few days despite the index’s record levels.
“Given the developing internal numbers at the tail-end of the period, we would be more comfortable in booking profits and positioning for another cycle when the excesses are squeezed out,” he said.
In the year to date, the PSEi has gained 7.9 percent from its 7,230.57 close on December 29 last year, the last trading day of 2014.