Market awaits IPOs

The local stock market is expected to consolidate this week as some investors await fresh catalysts, while others prepare for upcoming initial public offerings.

The main-share Philippine Stock Exchange index lost 68.02 points, or 1 percent, last week to close at 6,539.81 on Friday.

The market is set to reopen Tuesday after a long weekend break to give way to the election of barangay leaders nationwide Monday.

Joseph Roxas of Eagle Equities said stock prices would likely be flat or slightly lower this week, consolidating within a range of 100 basis points from current levels near 6,500.

“Some of the liquidity is being taken away by the IPOs. While the money is still there, you can’t buy anything else,” Roxas said.

If there’s warm demand for upcoming IPOs, particularly Robinsons Retail, this would dampen stock prices as some people would sell more stocks to switch to the new offerings, he added.

Jonathan Ravelas of Banco de Oro Unibank said if the PSEi would continue to hold above the 6,500 support level, the index may try the 6,700 levels.

“Otherwise, a retest towards 6,300 may occur,” he said.

For now, he said, investors were relieved that the tapering of the US monetary stimulus won’t start until the first quarter of 2014. Doris C. Dumlao