Tight trading range seen
Local stocks are seen trading within a tight range this week but with some upside likely to be provided by selected issues.
The main-share Philippine Stock Exchange index last week closed at 0.25 percent to 4,274.51 as overall sentiment was dampened by volatile external markets.
With a seeming lack of catalysts, AB Capital Securities analyst Prince Anthony Yeung said the main index would likely stay within its current trading range of 4,200 and 4,340 this week. Coming from a two-day winning streak last week, he said the PSEi might start this week on a positive note but end flat compared to a week ago.
“The main index may top 4,300 once again but will not find enough reason to post a new year-to-date high,” he said.
Yeung urged investors to be on the lookout for selective trading opportunities. For instance, he noted that stocks like Megaworld and AGI had been battered recently and were now below their fair values based on earnings capabilities.
He said mining stocks Philex and Lepanto would likely continue to stay in the spotlight. Philex is seen to move strongly ahead of the June 3 ex-date of its property dividend while Lepanto is seen offering potential trading opportunities given its volatility.
Investors were also urged to watch out for URC and Ayala Corp. testing key resistance levels of P45 and P400, respectively.
“Foreign concerns will persist, leading to more sideward movement for the overall market. Meanwhile, local developments that investors will keep an eye on include inflation levels and the economic growth that the country posted during the first quarter of this year,” Yeung said.—Doris C. Dumlao
