The local stock barometer is seen to test the next big barrier at 9,000 as early as this week, especially if the fourth quarter economic growth results would be good enough for the market.
Last week, the main-share Philippine Stock Exchange index (PSEi) gained 101.3 points or 1.15 percent to close at 8,915.92 on Friday. This marked the PSEi’s upswing for the seventh consecutive week.
BDO Unibank chief strategist Jonathan Ravelas said investors were positioning ahead of the Jan. 23 (Tuesday) announcement of the country’s fourth quarter gross domestic product (GDP) growth performance.
“The economy probably grew by 6.7 percent year-on-year based on the consensus forecast,” Ravelas said, noting that BDO’s forecast was in line with consensus.
Last Tuesday, the PSEi tested a new intraday peak of 8,969.18.
“Chartwise, the week’s close at 8,915.92 highlights that the market still has some gas to try the 9,000 to 9,100 levels,” Ravelas said.
BDO sees immediate support level at 8,600.
Christopher Mangun, head of research at Eagle Equities Inc., said that for the last two weeks, the market had been building a base between 8,750 and 8,920 to be able to breach 9,000.
“With the continued inflow of foreign and local money, I have no doubt that we will see it test 9,000 (this) week,” Mangun said.
“The other possibility is we continue to build a base within this area for even more momentum so that we can break and stay above 9,000,” he added.
Last week, he noted that about P2.86 billion in net foreign buying perked up the stock market.
Blue chips will likely continue to dominate investors’ interest in the following weeks, he said.
Meanwhile, he noted that there was a lot of action in banking stocks in the middle of last week as companies like Metrobank and Bank of the Philippine Islands disclosed their respective stock rights offering of P60 billion and P50 billion.
“Some investors anticipated a lower offer price which had a negative impact on the stock. On the other hand, other investors saw this as buying opportunities and rushed in to support the price,” he said.
Speculation on the entry of a third telecom player also intensified last week, benefiting stocks like EasyCall and Now Corp. which respectively surged by 192.5 percent and 42 percent last week.
“There is a big possibility that we will see a correction in these stocks (this) week,” Mangun said.—DORIS DUMLAO-ABADILLA