PH stocks charge further into bull territory

The local bourse continued charging into the bull territory on Tuesday, entering into yet another 31-month high due to easing monetary policies, with experts saying that the 8,000 level may not be entirely impossible—if traders are careful.

By the closing bell, the benchmark Philippine Stock Exchange Index (PSEi) added 0.20 percent, or 14.96 points, to 7,432.21.

This is already 20.68 percent above the index’s lowest closing price in recent months at 6,158.48 on June 21. For a stock market to be considered already in bull territory, it must have risen by at least 20 percent from a recent low.

Analysts said this was mostly due to the Bangko Sentral ng Pilipinas slashing its benchmark interest rate, as well as the upcoming cuts in the cash buffer requirement for banks.

But could an 8,000 year-ender be possible?

Alfred Benjamin Garcia, research head at AP Securities Inc., said it was “not impossible, but it could be a stretch.”

Correction

“We think the market is ripe for a short-term correction, so for now we’re still standing by our year-end 2024 target of 7,662,” Garcia said in a text message.

Trading Edge Consultancy chief investment strategist Ron Acoba also noted that while the index was on the way to 8,000 after finally hurdling the 7,000 level, “there will always be pockets of pullbacks and consolidations along the way.”

A correction or pullback often happens when a stock market heats up and is overbought, meaning it has rapidly risen over a short period of time. Thus, this signals that some prices may be inflated, resulting in a decline.

“Short-term profit-taking activities may actually take place in and around the 7,500 level, since this level is its pandemic high, which it marked back in 2021,” Acoba said, noting that a “Christmas rally” during the holiday season may help lift the market.

The PSEi reaching 8,000 by the end of the year entails an increase of at least 7.63 percent from its current level.

Meanwhile, Rastine Mercado, research director at China Bank Securities, warned that investors may become “increasingly defensive” as the high-stakes US elections near.

“A key factor in sustaining the bull run is having an orderly consolidation,” Mercado said in an email.

Value turnover was at P11.79 billion for 1.02 billion shares on Tuesday as foreigners made net purchases worth P2.99 billion, stock exchange data showed.

Property firms recorded the steepest climb with a 0.95-percent gain, buoyed by index heavyweight Ayala Land Inc., which was the top-traded stock as it rose by 2.96 percent to P38.30 per share.

There were 102 gainers against 100 losers, while 57 companies were unchanged.