PH SHARES WEEKLY OUTLOOK

Positive bias despite some profit-taking

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The equities market is seen dwelling on positive developments this week, boosted by corporate earnings, with some profit-taking as the benchmark PSEi meets resistance at the 7,800 level.

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In its weekly outlook, BPI Asset Management said the Philippine Stock Exchange index (PSEi) will trudge on a “slightly upward bias” in the absence of any key developments and major economic data.

“The index will continue to track overnight market movement in the US and more closely track markets in neighboring Asian countries. Investors would also be closely monitoring corporate earnings results,” it said.

On the technical side, AB Capital Securities Inc. said the PSEi is “nearing the psychological resistance at 7,800-level–opening it to profit-taking early next week.”

“This week’s pullbacks can serve as accumulation points, given an intact uptrend and strong local economic fundamentals. Index support can be found at 7,600, while 7,800 serves as the immediate resistance,” AB Capital said.

“The biggest catalyst for next week is the continuation of the Greek-Eurozone debt talks. A decision by Greece to exit the Eurozone would have a wide-ranging and negative impact on financial markets which may cause investors to flee from risky assets,” it added.

However, Jason Escartin of F. Yap Securities Inc. said that the main PSEi is still on track to the consensus forecast of 8,000 by year-end even if it faces several “challenges.”

“Aside from developments at home, part of the macro backdrop is still tied to the US, specifically on the ‘normalization’ of the widely-followed interest rate. With the upcoming US President’s Day and Chinese Lunar New Year’s holiday, volume could slow as some fund managers take a break,” Escartin said.

Justino Calaycay Jr., analyst at Accord Capital Equities Corp., said the market will retain optimism this week deriving positive sentiment on factors such as the “BSP’s decision to lower its inflation target . . . Plus, earnings should play into the consciousness of investors when they return for the Chinese New Year-week of trades,” he said.

“Our stance in the coming week remains hinged on earnings–seek bargains among the top tiers for our long-term portfolio, while keeping close tabs on possible momentum, quick-turn-arounds which we nevertheless limit to no more than one-fifth of the funds, net of liquidity position,” Calaycay said.

On Friday, the PSEi closed higher but failed to beat its 10th all time high of 7,782.57 on Monday, February 9. It rose by 0.76 percent or 58.86 points to 7,773.45, while the All Shares increased by 0.64 percent or 28.86 points to 4,506.

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