Philippine Daily Inquirer
1:41 am | Monday, September 24th, 2012
The local stock market is seen consolidating this week as investors await fresh catalysts to buy into the market in a big way.
Last week, the main-share Philippine Stock Exchange index shed 30 points, or 0.57 percent, to close at 5,292.06, declining for the last four consecutive sessions. Weak factory data from China and local mining woes also dampened overall sentiment especially toward the end of the week.
“I think there will be a small correction then basically some fund rotation. The second-liners that have been bypassed by the market might benefit from the rotation,” said Erico Claudio, chief strategist at Pentacapital Investments.
On the macroeconomic front, Claudio said there were not much significant data to affect trading. On the other hand, he said he has yet to digest how businessman Manuel V. Pangilinan’s venting out of frustration would affect the market moving forward.
MVP chairs four index companies, the country’s most valuable stock PLDT, biggest mining firm Philex, infrastructure holding unit Metro Pacific Investments and leading electricity distributor Meralco. Other listed companies within the MVP group are Philex Petroleum and Metro Pacific Tollways.
The chief executive of Hong Kong-based First Pacific threatened to pull out of the Philippines after being dragged into the feud between Foreign Secretary Albert del Rosario and Senator Antonio Trillanes IV in connection with the Scarborough Shoal territorial dispute.
“I think the market is gaining ground. Of course there will still be correction but it’s getting stronger,” said Eagle Equities president Joseph Roxas. He said the index might test a low of 5,200 to a high of 5,400 this week but noted that the downside risk to 5,200 was minimal.
Freya May Natividad, an analyst at 2TradeAsia.com, said climbing above the 5,300 zone might be the tall order for the week as the market remained vulnerable to overseas sentiment.
“Some skeptics might wait for potential consolidation within 5,200-5,300. For now, another sideways trend is expected, although most might use this lull to reposition gradually in preparation for the seasonal kick in corporate, consumer and fiscal expenditure toward the tail end of the year,” she said.—Doris C. Dumlao
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