Tough week ahead for stocks
Local stocks had a rough week as the main price barometer Philippine Stock Exchange index (PSEi) dipped 3.5 percent and stayed in the red through the last five sessions on taper fears and the lack of strong drivers. The benchmark index ended at 6,355.18.
Analysts said that due to this weakness, the measure had room to move lower as corporate results have so far failed to surprise and stayed within expectations while liquidity lessens due to the slew of initial public offerings.
These factors would “limit” rallies in November and December, stockbrokerage firm AB Capital Securities Inc. said in its weekly outlook report. It pegged the support level at 6,200 while resistance was at 6,600.
“We think it is still better to be selective in buying equities as we expect the broader market to remain sideways. Our preference is on stocks that have specific growth stories and reasonable valuations,” AB Capital said.
2TradeAsia.com, in a separate report, said the market’s continued drop suggested that it could trek lower to 6,300.
“In a scenario when no positive news are expected, this trend could support limited movements within 6,200-6,600
range,” it said. 2TradeAsia said there was a chance for it to move back to 6,600 or even 6,800 “although the lacking variable is the extra catalysts to push up gauges within this territory.”
Both stockbrokerage firms said investors would look toward more corporate earnings slated for release this week and new stock plays.
Potentially hogging the limelight today is the listing of Robinsons Retail Holdings Inc., which raised about $650 million from its initial public offering.
There were still buying opportunities, AB Capital said, but it noted that investors should be more selective. Its picks include Megaworld Corp. and Century Properties Group.
2TradeAsia noted that financials could soften in terms of interest coming from fund managers as banks raise capital to comply with upcoming Basel-3 standards.
It added that holding firms could be “sidelined” as excitement over their infrastructure prospects dampen, at least, until firmer announcements from the government are made. Miguel R. Camus
