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Market to keep on trying to breach 8,000 level

/ 04:07 AM October 21, 2019

The country’s equity benchmark index is expected to trade within a tight range given few major drivers and the difficulty in breaching the 8,000 level, an analyst said.

The view comes as the Philippine Stock Exchange index closed the week little changed at 7,885.23 versus last week’s close of 7,884.29.

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“8,000 remains a strong psychological resistance so investors should remain vigilant,” said Luis Gerardo Limlingan, managing director at Regina Capital Development Corp.

He noted that the market could see investors placing bets ahead of the third quarter earnings seasons.

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Moreover, the upcoming release of third-quarter growth could “make or break” the 8,000 level, Limlingan noted.

Sentiments last week were dampened after China reported slower than expected growth, again raising fears of a global slowdown and amid a lingering trade dispute between China and the United States.

“If there are indications that growth in the Philippines is performing above expectations, then foreign funds will probably remain or invest further. Otherwise there may be a flight to quality,” Limlingan noted.

Despite the challenging environment, some companies are still keen on tapping the Philippine equity market via initial public offering (IPO) this year.

Consumer electronics manufacturer Cal-Comp Technology (Philippines) Inc. and leading food and beverage kiosk operator Fruitas Holdings Inc. were given regulatory approval to sell shares to the public in November this year.

Cal-Comp hopes to raise as much as P10.6 billion while Fruitas is targeting to raise up to P1.2 billion.

Last week, what could have been the country’s largest IPO was shelved after Metro Pacific Investments Corp. found a strategic buyer for its hospital unit.

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