Stock Market

PSEi to climb further as sentiment stays positive

Posted on May 29, 2017

THE MARKET is expected to trek higher this week on the back of sustained confidence on the country’s good fundamentals, with short-term worries failing to dent investor optimism.

After a five-day winning streak, the Philippine Stock Exchange index (PSEi) took a breather on Friday, dropping by 4.16 points or 0.05% from Thursday’s finish to end the week at 7,867.49 as investors locked in gains amid lack of leads.

Despite Friday’s decline, however, the bellwether index gained 1.3% for the week from its 7,767.62 close last May 19.

The broader all-shares index also ended the week higher at 4,689.88 from May 19’s finish of 4,634.25.

“Market outlook would continue to be positive especially with the package trade deals made with Russia and as long as the conflict in Mindanao is properly handled,” Aniceto K. Pangan, equities trader at Diversified Securities, Inc., said via text.

He noted that the influx of funds last week is an indication of foreign investors’ confidence in the local market.

“[T]he planned increase in public float requirement for listed companies by SEC (Securities and Exchange Commission) is an added boost to attract more investors, foreign and local, to participate in our market. All these together with the increase in business confidence for [the second quarter], we may see the market continue to propel upward,” Mr. Pangan added.

SEC Chairperson Teresita J. Herbosa said last week that the corporate regulator will soon require listed companies, as well as firms wanting to join the local bourse, to sell at least 15% of their issued and outstanding common shares to the public, compared to the current minimum float of 10%.

“Market will try to be a little bit upbeat upward this week. Everything has been talked about related to current local concerns and the support for the President remains high. Investors are also focusing on the good economic condition of the country as it is believed that the situation in Mindanao is already being handled by the government,” Summit Securities, Inc. President Harry G. Liu said in a phone interview.

“On the Martial Law worries, the more crucial issue for investors is when it is extended to Luzon. That would be a main concern,” Mr. Liu said.

Mr. Liu said Eagle Cement Corp.’s debut on the local bourse today will set the tone for the week. He pegged the PSEi’s support at around 7,650-7,700 range and resistance at 7,800-8,000.

Justino B. Calaycay, Jr., senior research analyst at Philstocks Financial, Inc., said last week’s performance reflects a “positively biased” sentiment in the market.

This week, he said investors will start positioning ahead of the US Federal Reserve’s regular economic assessment and rate setting meeting in mid-June, “with bets on a tweak still ahead of a stay.”

Mr. Calaycay expects the PSEi to test the 7,900-8,000 band this week as sentiment continues to be positive. -- Imee Charlee C. Delavin