Market may stay above 7,000 level this week

MANILA, Philippines — The stock market index may move sideways and stay above the 7,000 level this week, or it could tank and test the next support level at 6,800, traders said. 

This is because of what happened to the market last week, which saw the index hit a 52-week low.

“However, the bottom line is that we will not see any significant gains in this market until we see foreign outflows slow down,” said Christopher Mangun, head of research of Eagle Equities. 

Mangun believes that majority of investors will continue to stay on the sidelines while foreigners are still dumping their shares.

Local investors, thus, will let the market decide what it’s going to do. The result is lower trading volumes. 

“Investors in this market will still continue to buy blue-chips that were laggards last year like Gokongwei and Aboitiz companies. Major telco companies PLDT and Globe have also performed well in the last few months which could be attributed to the delay in the implementation of the third telco. Opportunities in second-liners will also be more attractive,” Mangun said.

The Philippine Stock Exchange index ended the week down 73.43 points or 1.04 percent to close at 7,004.77. This is the sixth week in a row that the index finished with a loss. 

Turnover value was extremely low again this week at P24 billion. 

Foreign net-selling for the week was P2.62-Billion. 

In all, the index was down for most of the week and would have closed below the 7,000 key-support level if not for the recovery on Friday. 

“Overall, our market performed better than the rest of the global markets despite low trading volumes and heavy foreign outflows. It could be because of the fact that western markets are coming off recent highs, while our market has been taking a beating for most of the year. It is impressive that the index closed above the 7,000 support level, but we are not out of the woods yet,” Mangun said.