MANILA, Philippines - Investor confidence from the peaceful elections and robust first quarter corporate earnings will likely push share prices higher this week.
The sharp correction late last week provides an opportunity for bargain hunters, analysts said.
“The recently concluded elections continue to provide the present administration a new mandate to continue its economic and fiscal reforms,†said Jonathan Ravelas, chief market strategist at BDO Unibank Inc.
“This gave comfort to investors that the rally will still continue,†Ravelas said, adding that better than expected corporate earnings also fuel the optimism.
For Freya Natividad, analyst at online brokerage firm 2TradeAsia.com, the recent correction late last week “might be seized by bargain hunters ahead of 7,400-7,500 next resistance target.â€
The Philippine Stock Exchange index (PSEi) inched up 0.24 percent or 7,279.87, marking the sixth straight week the bellwether index gained, as investor sentiment was boosted by hefty first quarter earnings of listed companies.
On May 15, the main index pierced through the 7,400 level for the first time before ending at its 31st record high for the year at 7,392.20.
“The local barometer traversed sideways during the week with an upward bias, as players weighed speculations central bankers might scale back on stimulus measures over the near-term,†Natividad said.
For this week, the PSEi will range between the 7,100 to 7,500 but profit taking activities near the recent record highs could occur, Ravelas said.
“Anticipate technical breathers, especially once positive news is digested in the price,†Natividad said.
Investors will also be on the lookout for signs that central banks are easing monetary stimulus programs that flood the market with liquidity, Natividad said.
“Pending clear indications, expect volatility to prevail in equities, as some might be prompted to switch to other financial instruments to optimize on yields,†Natividad said.
2TradeAsia pegged the support level at 7,200 and resistance at 7,350-7,400.