PSEi seeking support after steep drop

Investors will be looking toward new support levels over the next few days after the Philippine Stock Exchange index’s (PSEi) weekly 5.6 percent plunge.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the benchmark measure was mainly dragged lower by external factors, including looming interest rate hikes in the Philippines and overseas coupled with the high-inflation environment worsened by Russia’s Ukraine invasion.

The PSE closed the postelection week at 6,379.17. Ricafort said the PSEi’s next levels of support were around 6,200 to 6,100 while initial resistance was seen at 6,560-6,670.

The sharp drop on Friday marked five consecutive sessions of declines for the PSEi. The past week saw the landslide victory of the late dictator’s son, Ferdinand “Bongbong” Marcos Jr., in the May 9 presidential polls.

“The financial markets and general public are still awaiting for additional details on the new administration’s economic team and cabinet members, continuity narrative, reform measures, and other policy priorities for the coming days and weeks,” Ricafort said in this market outlook report for the week.

Gabryle Aguila, head of equity research at stock brokerage house Unicapital Securities Inc., said the PSEi moved in line with the slump across global indices.

In a weekly report on the company’s Facebook page, Aguila said the recent drop also made the PSEi more attractive relative to its corporate earnings potential over the next 12 months, thus making the present area “a good fundamental level to accumulate.”

Aguila was also among the few equity analysts who publicly acknowledged the impact of the election results on the stock market last week.

“Domestically, some investors have taken a risk-off stance with the results of the Philippine national elections,” Aguila said.

—Miguel R. Camus INQ