PH SHARES WEEKLY OUTLOOK

Volatility seen as PH elections loom

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LOCAL stocks are expected to be kept under a tight rein this week as investors wait for indications of the outcome of next week’s national elections, April inflation data due to be released on Thursday, and the results of earnings announcements from several blue-chip firms, analysts said over the weekend.

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“The Filipino electorate will troop to voting precincts in a matter of days to cast their vote for new leadership. Markets will be on a tight watch to see whether or not the voting process will be held in a peaceful manner, given its direct impact on the country’s political risk premium weighting,” 2Trade Asia.com said in a note.

Last week, the benchmark Philippine Stock Exchange Index (PSEi) shed 1.32 percent or 96 points week-on-week to end at 7,159, with the services sector the biggest loser, falling 3 percent, followed by holdings firms, which shed 1.9 percent.

Average value turn over improved by nearly 10 percent to P6.3 billion, although declining issues edged out gainers, 118 to 74.

Foreigners were net buyers at P442 million, a reverse from the prior week’s P188 million selling, but are expected to remain mostly on the sidelines ahead of the election.

“Expect volatile trades to prevail, with foreign funds likely to remain at bay. The release of better-than-expected inflation for April might provide some boost, but this would likely be overshadowed by news of the emerging winner in the Presidential race,” 2TradeAsia.com said.

Earnings reports expected
Meanwhile, Jonathan Latuja, equity research analyst at Uncicapital Securities Inc., said that for the week investors would be cautious, as a number of major listed firms are set to release their respective earnings results for the first three months of the year.

Publicly-listed firms that are set to announce within the week their respective results for the first quarter include Ayala Land Inc., Metro Pacific Investments Corp., Globe Telecom Inc., Aboitiz Power Corp., and Aboitiz Equity Ventures Inc.

Finally, Luis Limlingan, business development head at Regina Capital Development Corp., said that the main index is facing more selling pressure this week as prices are poised to retest the 7,100-point support level.

“With prices trading near our projected channel support, a rebound is more likely to happen at this point, which traders could either use as a buy trigger for rallying issues or a trigger to sell positions for issues already trading in a downtrend,” Limlingan said.

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