Philippine stocks seen to rise slightly this week
Philippine Daily Inquirer
Local stocks are seen to trade within a tight range but with some upward bias this week as all eyes await the President’s State of the Nation Address (SONA), the Bangko Sentral ng Pilipinas’ monetary setting and the start of the second-quarter local corporate reporting seasons alongside external developments.
The main-share Philippine Stock Exchange Index (PSEi) traded marginally lower (-0.07 percent) week on week to end 5,210.89 on Friday.
Gregg Adrian Ilag, an analyst at AB Capital Securities, said local stocks were currently trading at expensive levels relative to earnings. However, he was expecting corporate earnings in the second quarter to ease valuations as well as encourage sentiment.
“The index’s current levels are not attractive to chase in terms of risk and return. However, a full-year earnings growth of 27 percent will bring valuations back to the long-run average,” he said.
Meanwhile, he said technical indicators were suggesting that the index would range between 5,200 and 5,300. “Dips below 5,200 may not be strong enough to warrant deeper corrections as the moving averages are near 5,100,” he said.
“Select issues remain favorable in terms of valuations and fundamentals such as those we recommend to investors,” he said.—Doris C. Dumlao
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