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PSEi seen testing 7,800 level

/ 05:05 AM January 07, 2019

The local stock barometer is seen to retest the 7,800 resistance level this week, a key barrier that the market needs to conquer to be able to recover to the 8,000 levels.

Last week, the main-share Philippine Stock Exchange index (PSEi) racked up a total of 295.09 points, or 3.95 percent, to close on Friday at 7,761.11.

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BDO Unibank chief strategist Jonathan Ravelas said investors were betting Philippine equities could still do well amid expectations of cooling inflation and Wall Street’s volatility.

“Investors are buying blue chips that will benefit from a possible reversal of foreign inflows and positioning in stocks that will gain as inflation eases,” he said.

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On Friday, it was reported that inflation had eased for the second straight month, settling at an annual rate of 5.1 percent in December, or below the 5.7-percent market consensus.

“The week’s close at 7,761.11 signals the market still has the momentum to try the 8,000 levels, as we touched the 7,800 levels [last] week. Look for a close above the 7,800 level to signal that the assault toward the 8,000 levels has began,” Ravelas said. “However, failure to clear the 7,800 levels could trigger some profit-taking back toward the 7,300 to 7,500 levels.”

Last week, value turnover amounted to P19.56 billion. Foreign investors rekindled their interest in local equities, with net foreign buying reaching P1.21 billion for the week.

Eagle Equities head of research Christopher Mangun noted the heavy trading in PSEi companies last week, causing almost a dozen blue chip issues to end the week up by more than 5 percent.

“Overall, this is a very good start for 2019 as this will bring confidence to more investors to get into the market after last year’s dismal performance,” he said.

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