Stocks seen moving sideways

The local stock market is seen continuing its consolidation phase this week as investors digest the third-quarter corporate earnings reporting season.

The Philippine Stock Exchange index (PSEi) closed on Friday at 7,217.34, nearly unchanged from the previous week’s level of 7,205.72.

“The local stock market moved sideways during the course of the week as investors continued to weigh in the mixed third-quarter corporate earnings results. The latest rally in Wall Street failed to push the index higher,” said Banco de Oro Unibank chief strategist Jonathan Ravelas.

“Chartwise, expect the index to continue to range between the 7,000-7,300 levels in the week ahead,” he said.

Michaelangelo Oyson, managing director of BPI Securities, said the recently concluded third-quarter reporting season showed a mixed bag of results. He noted that the consumer sector posted stronger than expected results while the gaming sector likewise delivered good results. In the banking segment, he said Security Bank exceeded expectations.

However, he noted that the market has yet to fully price in the impact of earnings downgrade by index heavyweight PLDT on intensifying competition. After announcing lower-than-expected third-quarter earnings, PLDT cut its full-year earnings forecast to P37 billion from P39.5 billion.

“I still see the Santa Claus rally happening this year,” Oyson said.

Oyson said 7,886 would still be a “reasonable” target over the next 12 months based on an assumed earnings growth of 12-13 percent. But he said the market could be challenging as it was now moving from the middle to the late cycle.

BPI Securities sees global flows dominating market movements over the next 12 months. Doris C. Dumlao