Market expected to return to 7,300-pt level this week

MANILA, Philippines - The local stock market is expected to return to the 7,300 level this week as more company earnings are expected to come in.

Analysts said the market may drift sideways in the coming days, but should mostly move with an upward bias.

“For next week, we still see local earnings results as the main driver of share performance similar to the previous weeks,” analysts at AB Capital Securities Inc. said.

They said sectors to look out for includes gaming and oil-dependent companies.

“For gaming, investors will need to watch out on RWM’s earnings results to get an overall picture in the country’s casino industry. Despite Bloomberry recording record revenues, fears are mounting that the casino industry is not growing faster than expected to support three players (Resorts World Manila, Bloomberry, and Premium Leisure Corp.),” they said.

“Meanwhile, oil-dependent companies such as Phoenix Petroleum and Petron are expected to post lower margins as it write-off inventories from declining crude prices,” they added.

Luis Limlingan, managing director at Regina Capital Development Corp., said the market is seen to perform better this week as last week’s bullish conditions on support were met.

He said key signal to watch out for the next five trading days is the breach above the 7,250 mark which would trigger further advances to 7,360.

“On the other hand, keeping close watch on 7,160 support is advised. This is an essential support base that the index needs to hold above to sustain short to medium term uptrend,” Limlingan said.

Week-on-week, the benchmark index shed off 0.14 percent after ending Friday at 7,205.72 while the all shares index likewise declined by 0.16 percent.

The services firms suffered the biggest blow last week, losing 3.32- percent week-on-week s dragged down by Tuesday’s disappointing earnings performance of the index heavy-weight Philippine Long Distance Telephone Co.