LOCAL EQUITIES may firm up this week as investors expect good first semester earnings results and as the market awaits the president’s State of the Nation Address (SONA).

The benchmark Philippine Stock Exchange index (PSEi) gained 0.14% or 12.02 points to close at 8,270.07 last Friday.

On a weekly basis, it racked up 128 points to 1.58%, driven by mining and oil which jumped 9.3%; financials with a 5% uptick, and holding firms with a 2.4% increase.

Turnover was valued at P36.65 billion for the week on the back of P3.90 billion in foreign net inflows.

Online brokerage 2TradeAsia.com said last week’s market performance shows improvements in investors’ risk appetite, driven by monetary easing measures such as the reserve requirement ratio (RRR) reduction by the Bangko Sentral ng Pilipinas.

The third and final stage of the central bank’s phased reserve ratio cuts will take effect on July 26, which will bring the RRR of big banks to 16% and thrift banks to 6%.

“For now, markets will heed for first half earnings results, as well as guidance how second half would fare,” 2TradeAsia.com said in a market note.

AAA Southeast Equities, Inc. Research Head Christopher John Mangun also noted that investors will be looking at better corporate earnings for the second quarter, in addition to expectations of better gross domestic product (GDP) numbers.

The Philippine Statistics Authority is scheduled to release second-quarter GDP data on Aug. 8.

“If we see an increase in traded value on top of more foreign fund inflows, we may see it reach that resistance level in no time,” Mr. Mangun said in a research report, citing a resistance estimate of 8,480.

“Overall the market looks extremely attractive right now and I am confident that we will see it do much better in the following weeks.”

President Rodrigo R. Duterte will also deliver his SONA before Congress on Monday, which could provide businesses clarity on the administration’s plans and priorities for the next three years.

“This may also provide investors with more optimism which will fuel the rally,” Mr. Mangun added.

Meanwhile, 2TradeAsia.com said key items that may be covered in the SONA include the administration’s efforts on the peace and order situation, especially for the West Philippine Sea, as well as the government’s infrastructure drive.

“Having addressed inflation is already factored into share prices, which may prime up interest for stocks that are on capital-intensive mode,” the company said.

On the international front, global markets may still focus on developments on the trade deal between the United States and China.

AAA Equities’ Mr. Mangun placed the PSEi’s support from 8,000 to 8,150, with resistance from 8,360 to 8,480. — Arra B. Francia

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