Stock-Market Outlook – BusinessMirror

Last week

SHARE prices gained last week, the fifth-straight week of increase, as sentiments improved following up-to-par third-quarter corporate reports and as inflation seemed to ease.

The benchmark Philippine Stock Exchange index (PSEi) gained 150.61 points to close at 6,437.38 points.

The upward streak of the main index was broken only on Wednesday when it gave up points ahead of the 75-basis points rate hike that monetary authorities announced the next day.

Volume of trade, however, remained anemic, with average value at P5.34 billion. Foreign investors, meanwhile, were net buyers at P1.7 billion.

All other sub-indices ended on the green. The broader All Shares index gained 67.74 points to close at 3,396.63 points. The Financials index was up 2.78 to close at 1,617.13. The Industrial index surged 369.80 to close at 9,484.77. The Holding Firms index climbed 149.23 to close at 6,101.81. The Property index rose 63.16 to close at 2,845.89. The Services index increased 50.56 to close at 1,658.36. And the Mining and Oil index inched higher by 186.68 to close at 9,845.23.

For the week, gainers edged out losers 141 to 84 and 18 shares were unchanged.

The top gainers were: Converge Information and Communications Technology Solutions Inc.; ACE Enexor Inc.; Geograce Resources Philippines Inc.; Top Frontier Investment Holdings Inc.; Metro Alliance Holdings and Equities Corp. B shares; and, Euro-Med Laboratories Phil. Inc.

The top losers, on the other hand, were: Republic Glass Holdings Corp.; Keppel Philippines Properties Inc.; LFM Properties Corp.; Easycall Communications Philippines Inc.; AllHome Corp.; and, Philippine Bank of Communications.

This week

SHARE prices may continue on an upward trend this week. But there will be consolidation as investors are now taking new cues to trade.

Jophet Louis O. Tantiangco, senior research analyst at Philstocks Financials Inc., said the third-quarter corporate reports season has shown strong results with the total net income of PSEi members registering a 44-percent year-on-year growth. This has helped the local market in staging a rally in the past weeks.

“While the strong corporate earnings may still give a boost to sentiment, with the third corporate reports season already through, investors are now expected to look for catalysts that would help in sustaining the corporate sector’s strong financial performance,” Tantiangco said.

“Aside from this, investors are also expected to look for cues with respect to the monetary policy outlook of the Bangko Sentral ng Pilipinas and the Federal Reserve. Cues that would point to a slow down in their monetary tightening may lift sentiment, while cues that would point to a continuation of their aggressive policy path may lead to otherwise,” said Tantiangco.

Meanwhile, technical readings of Broker 2TradeAsia showed the upward trend of the main index was intact, but some momentum shifts may happen over the coming sessions are expected.

“Monitor volumes, especially as funds start screening potential 2023 bets, adding or dropping cashflow reliable or vulnerable stories,” the broker said.

Chartwise, the local market may continue to test the 6,400 resistance level. If it is able to establish its ground at the said line, this will be its new support while its next resistance is seen at 6,600, Tantiangco said.

Stock picks

BROKER Regina Capital Development Corp. advised to sell on rallies on the stock of Ayala Land Inc. after a breakout session last week.

“Now that it has rallied, investors may want to sell some of their shares to lock in some gains while it is still on its strength,” the broker said.

The shares of Ayala Land closed last Friday at P29.70 apiece.

Meanwhile, Regina Capital advised to buy on pullbacks on the stock of Universal Robina Corp. as it broke its resistance at P130.

“The price action points to bullishness as momentum fastened along with declining selling pressure. The bollinger bands continued to widen, albeit not showing any sell signal yet. URC might have a retracement in the following days, and it is best to buy during pullbacks as this could further move upwards in the medium term,” it said.

The shares of Universal Robina was traded last week at P131.90 apiece.

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