Stocks seen to continue moving sideways

MANILA, Philippines - Share prices will likely remain in their sideways trading ranges this week as local investors continue to temper their moves in the absence of clear market moving developments.

Analysts said the market is expected to open with downward bias with investors forced to rethink investment strategies given the Dow’s fall of 166 points Friday owing to political tensions in Egypt.

Last week, the PSEi closed flat at 3,970.34 or just 0.5 percent higher than the previous week.

Accord Capital Equities Inc.’s Jun Calaycay, however, expects the release of the country’s fourth quarter gross domestic product (GDP) growth figure to “provide the necessary positive spin to keep bargain hunters in the field.”

The National Economic Development Authority (NEDA) expressed confidence that GDP growth would hit seven percent, exceeding the original target of five to six percent.

For this year, growth is projected at between seven and eight percent.

January is poised to end in negative territory with only a day’s worth of trades left.

Value turnover declined to P23.25 billion (net of block sales) week-on- week even as volume turnover improved by over 16 percent to 11.927 billion. “This may be an indication of investors generally veering away from higher-priced, blue chip counters which continued to fall victims to heightened foreign selling,” Calaycay said.

While foreign selling has dissipated in the last four sessions, year-to-date position remains negative at P3.029 billion, a reversal of the positive P2.194 billion position at the end of January last year. 

Based on the net accumulated transactions through the first three weeks, foreigners have sold more than half-a-billion peso worth of Aboitiz Power (AP), SM Investments Corp., Metropolitan Bank and Trust Co., and Cebu Air.

On the other hand, net purchases of over P100 million over the same period have flowed into San Miguel, Petron, Lopez Holdings, Fil-Estate Land (LND), Manila Water and Security Bank.

 “We see the market building and strengthening support at the 3,880-90 range even as it attempts to break through the 4,000-4,040 resistance and restore the market to the previous trading band,” Calaycay said.

Among the actively traded stocks last week were Alliance Global Group Inc. which rose 4.8 percent, AP, LND (7.7 percent), and Meralco.

AB Capital Securities Inc.’s Maria Arlysa Narciso said the first quarter will see the index testing several support levels with 3,850 being the crucial one.

“From its record highs last year, the PSEi is on a road of correction. The first quarter may pose as a challenge for investors to seek more keenly this time stocks with sure earnings growth,” Narciso said.

“The play of uncertainty is also evident in each day of the past week when the index would make no firm and sustained move. Such trend may prevail for the coming week with activities seen in stocks with stories that appeal to investors,” Narciso added.