BETS are on that the market is likely to trade in positive territory after the Philippines managed to stage a successful Association of Southeast Asian Nations (Asean) Summit, despite the presence of external risks that could sway investor sentiment.
In a market note over the weekend, online brokerage Philstocks sees a positive trend, based on positions taken largely by foreign investors in recent weeks.
“Net foreign inflows, increased value flows (based on the averages), improvement in the market’s week-on-week breadth, to name a few, are encouraging,” the note read. “Furthermore, we have seen modest—at the very least—first quarter numbers, the bulk of which will start flowing next month [in May].”
Philstocks noted the bellwether PSEi has shown its strength in climbing back to the 7,700 levels—it just needs more evidence to validate the growing optimism.
In an interview on Sunday, Philstocks Senior Research Analyst Justino Calaycay Jr. said he continues to advise investors to approach the market with caution.
“On one hand, we are anticipating more earnings numbers to come out, possibly even dividend declarations that may interest the market. The successful staging of the Asean Summit may lend some optimistic view to trades. On the other hand, external risk events are still hovering over the horizon,” he said, particularly a surprise win by far-right candidate Marine Le Pen could shake the market.
“The North Korea tension, among others, has the potential to temper sentiments,” he added.
Based on the chart, the immediate support is at 7,650 and resistance at 7,730, Calaycay noted.
Eagle Equities Inc. President Joseph Roxas said there might be a slight correction from last week, but prescribed a buy-on-dips approach as the market “will continue to be bullish until June.”
On Thursday, the PSEi declined to 0.85 percent or 65.44 points at 7,661.01. The broader All Shares fell to 0.73 percent, or 33.60 points at 4,579.20. The market was closed for a special non-working day on Friday in view of Asean-related meeting and events.