Market may attempt to reach 7,300 level this week

MANILA, Philippines — The Philippine stock market may attempt to reach the 7,300 level again this week after last week’s shortened and muted trading week, traders said. 

Jonathan Ravelas, chief market strategist at BDO, said there may be some improvement in investor sentiment as more companies release their third quarter corporate earnings results this week. 

“Last week, the market barometer PSEi rose 1.08 percent week-on-week to 7,140.29 as local investor sentiment improved from the initial set of third quarter corporate earnings. This encouraged more bargain hunting, causing the index to remain above the 7,000 levels,” he said. 

He said the week’s close at 7,140.29 still signals another attempt toward the 7,300 levels in the near-term. 

“However, failure to clear or test 7,300 levels could signal a retest of the 6,900 to 7,000 levels,” he said.

Several listed firms have already reported third quarter results the past two weeks including Robinsons Retail Holdings, Belle Corp., SM Prime Holdings Corp., and Cebu Landmasters Inc. 

Next week, companies that are scheduled to release third quarter earnings include Metro Pacific Investments Corp., Vista Land, SM Investments Corp. and International Container Terminal Services Inc., among others. 

However, the Market Call, a joint publication by First Metro Investment Corp. and the University of Asia & the Pacific, said it may take a while before the stock market sees investors return to the market.

“Since volume had been way below average in the first week of October, we cannot say that the PSEi has entered unequivocally the bear market. Inflation, we believe, has peaked in September, but it may take another month of inflation slowdown into November before investors may confidently return to the market,” it said in its latest report.

Investible funds may have reached their limits given the tighter liquidity in the market, it added.

“Unusually strong third quarter earnings could provide the impetus, although that remains a question mark, amidst the backdrop of inflation peaking in the third quarter and rising interest rates,” the report said.

Christopher Mangun of Eagle Equities said corporate earnings have started to come in and some have exceeded expectations so far. 

“This may be just what the market needs right now to draw investors back in. If the index can sustain this run and break above resistance at 7,200, then this may signal that the main index has bottomed out and is officially in a reversal to the upside,” he said.