Market seen turning cautious
After rallying last Friday following the government’s decision to ease lockdown protocols in Metro Manila, local stocks are seen returning to a cautious mode this week as some investors pocket recent gains.
Last week, the main-share Philippine Stock Exchange index (PSEi) racked up a total of 299.65 points or 5.41 percent to close on Friday at 5,838.84, outperforming regional markets as foreign funds flowed into the market. The biggest gain of 268.62 points or 4.82 percent was attained on Friday, the last day of trading before the effectivity of the latest MSCI rebalancing.
BDO Unibank chief strategist Jonathan Ravelas said investors turned optimistic after President Duterte announced the reopening of the capital and most businesses.
The week’s close at 5,838.84 highlights consolidation in the near-term, Ravelas said.
However, Ravelas noted that the risk-on theme remained fragile. “Bias in the near-term remains to the downside and may see more price action toward the retest of the 5,000 levels in the near-term,” he said.
BDO sees immediate support and resistance levels at 5,500 and 6,000 levels, respectively.
Manuel Lisbona, president of PNB Securities, said there was “fist in the glove” during Friday’s rally given a large spike in value turnover—over P20 billion versus an average daily volume of P4 billion to P5 billion—and the net foreign buying of P955 million. This was stark contrast to investor indecision seen during most trading days of May, he noted.
“Investor confidence has apparently increased in the wake of the government’s decision to move Metro Manila to [general community quarantine] status, bringing the economy closer to recovery,” Lisbona said. —DORIS DUMLAO-ABADILLA INQ
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