Stocks seen to consolidate

MANILA, Philippines—Local stocks are seen consolidating this week with some potential upside bias in case of positive surprises in the stream of first-quarter earnings reporting.

The main-share Philippine Stock Exchange index ended last Friday at 4,319.51, 1.05-percent higher than a week before, as investors took heart from indications of good first-quarter corporate results.

Banco de Oro Unibank chief strategist Jonathan Ravelas said last week’s performance suggested a near-term rise to the 4,400 levels. “Failure to clear the said level could call for a retest of the 4,200 levels,” he said.

AB Capital Securities said that this week, the major domestic market-moving developments would be the release of earnings results, the April inflation data and the Bangko Sentral ng Pilipinas’ monetary policy meeting on May 5.

Due to announce their financial results this week are Manila Electric Co., Aboitiz Equity Ventures, Aboitiz Power Corp. and Filinvest Land Inc.

“The inflation [number] is important as it will be a major consideration in the BSP’s next decision on monetary policy. We are projecting April’s inflation rate to be steady at around 4.4 percent compared with 4.3 percent last March,” AB Capital said.

The local brokerage said external markets, which have been volatile, would also continue to influence sentiments in the local market. But even as volatility has slowed down, it believed that share prices were hovering at overbought levels for more than a month now.

“Local share prices have rallied for six consecutive weeks now, duplicating a similar six-week run in October of last year. The sustainability of the winning streak will depend on results of the major drivers we have mentioned for [this] week. If we don’t get any major surprises or other market-moving catalyst, we should see the market go into a consolidation mode,” AB Capital said.

AB Capital sees the next PSEi support at 4,240 and resistance at 4,350.—Doris C. Dumlao