Philippine stocks might consolidate over the next few sessions after the bulls’ advance encountered strong resistance near the 7,000 level on Friday. The benchmark Philippine Stock Exchange Index (PSEi) climbed 0.58 percent, or 7.18 points, to 6,913.21 during the past week after reaching a high of 6,990.
Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., said strong corporate results helped fuel the recent rally. However, risks of a selloff could pull it back down to 6,700 to 6,800 should the bulls fail to defend the current level. Michael Ricafort, chief economist at the Rizal Commercial Banking Corp., said bulls will need to press harder to breach 7,000. He pegged the next support zones lower at 6,580 to 6,740 for the PSEi.
Meanwhile, BPI Securities president Haj Narvaez maintained his positive outlook with a year-end target at 7,500.
“There is a possibility for a slight correction or some sideways movement in the near term; it has been a remarkable rally since October,” Narvaez recently said. “But I still believe the arrow is pointing up until year-end—earnings will grow around 10 percent this year and rate cuts are likely coming. Combined, this is a recipe for [price or earnings] multiple expansion,” he added. INQ