Philippine stocks seen to rise
Philippine Daily Inquirer
Local stocks may continue to benefit from a favorable momentum this week but valuation concerns may cap gains.
Last week, the Philippine Stock Exchange index gained 2.22 percent to close at 5,794.20 on Friday, defying most expectations.
Banco de Oro Unibank chief strategist Jonathan Ravelas said Friday’s closing level implied that the market still had some gas to try the 5,800-5,900 levels in the near term. “However, bear in mind that the market is already in overbought state,” Ravelas said, adding that failure to try such levels could result in a pullback toward 5,450-5,480.
“We have already seen how fundamental valuations did not hold influence over the market this past week as share prices have continued to soar. While technical indicators likewise pointed to reaching overbought levels for stocks and the index alike, the current bullish sentiment might continue to propel the PSEi higher,” said Maria Arlysa Narciso, an analyst at AB Capital Securities.
But Narciso said there was a slight possibility that having gone up too early and too soon compared to the usual month or yearend window-dressing, there would be a moment of rest or consolidation for the PSEi.
“We find 5,500 as the psychological support. But using a 38.2-percent retracement, the support lies at 5,680,” she said.
Freya May Natividad, an analyst at 2TradeAsia.com, said the momentum in equities was supported by the surge in turnover to an average P8.44 billion last week, 11-percent higher week on week. In addition, the market’s performance yielded net foreign buying of P890 million against the prior week’s P182 million in net foreign selling.
“While volatility is still cautioned, the influx of funds in favor of attractive markets such as the Philippines is bound to prevail, at least for the first semester of 2013,” she said. “Continue to scout for ‘dark horses.’”
Immediate support is seen at 5,650-5,700 and resistance at 5,850-5,900.—Doris C. Dumlao