PSEi to test 6,900 level as investors await SONA

MANILA, Philippines - Numerous headlines here and abroad will keep investors busy in the shortened trading week, with positive leads expected to allow the bellwether index to re-test the 6,900 level.

“The State of the Nation Address (SONA), Chinese Ghost month, Monetary Board Meeting, July inflation numbers, corporate earnings and anticipations over second quarter gross domestic product are among the forces that may create some stir in the market going into the next and succeeding weeks,” said Accord Capital Equities Corp. analyst Justino Calaycay Jr.

Calaycay said liquidity will likely pick up in August, sufficient to support the market’s foray into the 6,900 to 7,000 range.

“Recall that the index failed to breach or remain at the 7,000 level due to valuation concerns. Should the earnings turn out better than expected, this will give investors the incentive to drive up the market,” Joyce Anne J. Ramos, an analyst at AB Capital Securities Inc.

For Rens Cruz, investment analyst at 2TradeAsia.com, the week will be marked by volatility as market players keep a close tab on headlines.

“Given the Philippine’s long-term underlying macro prospects, softness would be limited until large fund managers are able to digest key catalysts for growth,” Cruz said, adding that immediate support is 6,800-6,820 and resistance is at 6,900-6,950.

Week-on-week, the Philippine Stock Exchange index rose 0.53 percent or 36.48 points to close at 6,889.55. Value turnover remained thin but improved eight percent to P6.265 billion but foreigners were net sellers at P431 million.

Ramos said thin trading has been the theme of the stock market week as investors opt to stay on the sidelines due to lack of significant catalyst to push or pull the market.

“Hopefully, a flood of domestic data will be able to drown, or at least mute, the long-standing external influences that has tempered market activity and kept share prices inside a narrow range,” Calaycay said.

“We reiterate our advise for investors to continue hunting for bargain stocks, taking cautious positions, and range trading,” Ramos said.

Cruz said investors should seize on extreme pessimism to gradually take positions.