Market seen posting gains this week

Local stocks may regain some ground this week after taking a breather from a dizzying run-up, but 6,500 is seen remaining as a key barrier, market experts said.

Last week, the Philippine Stock Exchange index (PSEi) shed 2.49 percent to close on Friday at 6,315.07.

Joseph Roxas, president of Eagle Equities Inc., said local stocks might resume its ascent as the second quarter and first semester of 2020 were heading to a close. Key resistance is expected to remain at the 6,500 level.

Jonathan Ravelas, chief strategist at BDO Unibank, said the PSEi was weighed down last week by weaker consumer spending outlook following the grim data on overseas Filipino remittances.

Remittances fell by 4.7 percent year-on-year in March, the steepest decline seen since March 2018. This prompted foreign funds and local investors to lighten up their positions.

“The week’s close at 6,315.07 highlights the risk-on themes remain vulnerable and the test toward the 6,500 levels remains challenging in the near-term,” Ravelas said.

“Watch out for a break below 6,230 levels as it signals the retest of the 6,000 levels,” he added.

Last week, one stellar performer was newly-listed MerryMart, whose stock price nearly tripled to P2.95 a share from its initial public offering price of P1 per share.

Average value turnover increased to P9.34 billion a day from last week’s P8.54 billion.

There was net foreign selling worth P5.09 billion for the week, accelerating from the net outflow of P160.86 million in the previous week. Since the start of this year, about P60.6 billion worth of foreign funds had exited the market.

The PSEi had declined by 19 percent since the start of this challenging year. —DORIS DUMLAO-ABADILLA INQ