INVESTORS will be divided between optimists and pessimists as the stock market enters the final quarter, ushering in possible volatility for the remaining months of the year, analysts said.
Last week, the Philippine Stock Exchange index (PSEi) looked set to scale new heights, but trading ended up mixed although the last trading session was positive for local stocks.
The main index finished Friday’s session at 8,171.43, higher by 15.39 points or 0.18% from the previous day.
“Philippine equities looked poised for a turnaround when the market opened, accelerating past [Thursday’s] close before the midday recess,” said RCBC Securities, Inc. in its recap of Friday’s and the week’s stock market performance.
“However, traders lost their appetite when the market resumed as the market fell almost quickly as it rose,” it said.
RCBC Securities said value turnover remained above average as it has been in the past few days. It also said market breadth was positive, with 131 advancers and 77 decliners.
It said the market was boosted by the P64.5-billion block sale of Energy Development Corp. (EDC), which concluded its tender offer.
Foreign buyers ended as heavy net buyers at P31.7 billion, RCBC Securities said, adding that this was distorted by the EDC tender offer.
It said excluding the EDC transaction, foreigners bought SM Investments Corp. the most, placing this at a net buying of P6.3 million.
For this week, investors will be on the lookout for drivers as the final quarter of the year begins.
2TradeAsia.com, the online arm of F. Yap Securities, Inc., described the start of the fourth quarter as a tug-of-war between optimists and pessimists who have varying calls on whether the equities market still has room for upside.
It said “bears” argue on “heady valuation, and that geopolitical tensions could readily tilt the case in their favor.” On the other end, optimists or those that put their bet on a strong “ber” months see more room to partake on “ber”-month spending.
The research unit said optimists believe borrowing costs “are still benign and could readily provide the boost in share prices, based on earnings plus-side.”
“Either way, this sentiment variation spells volatility in equities, which could provide capital gains opportunities for those who do their homework diligently,” it said.
“The PSEi’s move below 8,200 may have startled some players, but not investors willing to ride the Philippine’s growth prospects. We view this ‘blip’ as temporary, possibly to shake off newbies against seasoned experts,” it said.
“Whipsaws are part of equities investing, and these occurrences present buying windows for those who are brave enough to partake on the country’s fundamental merits with a more calculated view on risks. Position on dips. Immediate support is 8,100, resistance 8,250-8,300,” it added. — V.V. Saulon