MANILA, Philippines—Local stocks are seen to consolidate this week while investors reassess their portfolios given recent gains and lingering global uncertainties.
Last week, the Philippine Stock Exchange index was up a modest 0.5 percent to finish at 4,783.52 on Friday as the momentum that allowed the barometer to post new highs started losing steam due to profit-taking by foreign investors.
Though the market closed on a positive note on Friday, the market seemed to be entering a consolidation, said PNB Securities deputy chief Manny Lisbona. “I am looking at a range of 4,739 to 4,818 for next week. Our technical indicators are still bearishly divergent from the index, meaning there’s a chance for prices to become cheaper in the next few weeks.”
Gus Cosio, president of First Metro Asset Management Inc., said the net foreign selling last week was not unusual because the broad market has so far provided a return of about 9 percent.
“The market, after all, is undoubtedly in a bullish trend, and any consolidation will simply strengthen the current trend. Personally, I would use any further dips to buy some of the good index stocks,” Cosio said in his financial blog on Friday.
He said that PLDT at P2,700 or below should be a good buy while BPI at close to P60 as possible should prove profitable over the course of this year.
“Metrobank below P80 would be a screaming buy given that its strength is even enhanced by the cut in reserve requirements,” Cosio said. “The Henry Sy stocks are doing great and I believe that both SMPH and SMDC should perform outstandingly, not to mention Belle, which is probably the cheapest in this stable.”
BDO Unibank chief strategist Jonathan Ravelas said the market appeared to have consolidated in the mid-4,700 range due to profit-taking.
“Unless the index drops below the 4,600-4,650 range, we expect a test at the 4,900-5,000 levels,” he said.
News that Greece is facing stumbling blocks to its $130-billion bailout likewise added caution to investors, resulting in bleak trading in Wall Street on Friday. The Dow Jones industrial average shed 89.23 points or 0.7 percent to close at 12,801.23 as US stocks took their worst beating for 2012.—Doris C. Dumlao