Market seen consolidating at 7,700-8,000 level
Investors are looking toward the 8,000 psychological barrier for the Philippine Stock Exchange index (PSEi) after the benchmark measure gained ground last week.
The PSEi rose almost 1.9 percent to 7,8489.94 as optimism rose over trade talks between the United States and China and bargain hunters took advantage of the recent decline, said Jonathan Ravelas, head of strategy at BDO Unibank Inc.
He expects the market to consolidate between 7,700 to 8,000 in the near term “provided the 7,500 levels do not give way.”
Chris Mangun, research head at stock brokerage firm AAA Equities, said investors were keeping a close eye on the 8,000 level.
“The key to the deal is still whether it can break above the 8,000 key-level,” Mangun said.
He added that investors that scaled backed their positions or exited the market could “come back once it hits 8,000.”
Still, there was reason for investors to be cautious. Mangun noted that optimism over US-China trade talks would likely be short-lived. Moreover, he said the government would likely miss its growth targets despite the country’s economic fundamentals staying “extremely strong except.”
“We do not think that the gains this week are enough to bring investors completely back into this market. This may be investors that are bargain-hunting as most stocks are at incredibly strong support levels,” Mangun said.
Volatile market conditions have not stopped some companies from forging ahead with their initial public offerings (IPO).
Last week, coconut products makers Axelum Resources Corp., which raised P4 billion, and billionaire Manuel Villar Jr.’s retail company AllHome Corp., which raised P14.9 billion, listed on the PSE.
Axelum ended the week at P4.50 per share, below its P5 IPO price, while AllHome closed at P11.54—above its debut price of P11.50 per share.
