Philippine stocks seen to eke out gains this week
Philippine Daily Inquirer
Stocks are expected to trade with some upward bias this week as many investors remain awash in cash and are eager to take fresh position in equities.
The main-share Philippine Stock Exchange index last week gained 1.2 percent to 5,156.46, hitting a new intraday high of 5,219.
“I think there’s a bit more room for the market to go up because many investors have cashed in during the listing of GT Capital Holdings,” said Joseph Roxas, president of Eagle Equities Inc.
“But then, East West Bank IPO [initial public offering] is coming up soon so it will siphon off some liquidity. But because it’s a smaller issue, not everyone can get allocation so the funds will flow to the market to seek other stocks,” Roxas said.
East West Bank has priced its IPO at the low end of the original price range at P18.50 a share, bringing the base IPO size to P4.54 billion, which can be upsized to P5.22 billion if the overallotment option would be exercised.
“I think we’ll have another run by June,” Roxas said, explaining that the local market would usually creep up after the tax season in April.
The immediate support level of the index is now at 5,100, which may be tested again this week, he said.
On the upside, the immediate resistance is seen at 5,200.
“Rallies will be generally liquidity-driven, as investors anticipate accommodative measures to keep the global recovery moving,” said Freya May Natividad, an analyst at 2tradeasia.com.
This development has been magnified by the increase in turnover and sustained net foreign buying at the local market, Natividad added.
“For now, most will be on the hunt for fresh measures that could catapult barometers to 5,500. Position on dips gradually and hold,” she said, adding that immediate support was at 5,100 while resistance ranged from 5,200 to 5,250.
Natividad said positive force was anticipated in the coming months, beginning with China’s receptive stance to complement fiscal adjustments in industrial nations.
On Friday, the Dow Jones Industrial index added 65.16 points, or 0.5 percent, to 13,029.26 as the early stream of first quarter US corporate results turned out to be better than market expectations.—Doris C. Dumlao
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