By Denise A. Valdez, Reporter

BPI SECURITIES Corp. is seeing the market trading sideways in the near-term until companies report their second-quarter earnings next month in what it anticipates to be the bottom of contraction even as the coronavirus pandemic continues.

But the brokerage remains to project the benchmark Philippine Stock Exchange index (PSEi) to land at around 6,200 by the end of the year.

In a virtual briefing Tuesday, BPI Securities President and CEO Hermenegildo Z. Narvaez said investors are currently on wait-and-see mode, hence the loss of momentum of the PSEi over the past days.

“I think the likelihood is we’ll probably trade sideways in the meantime. I think investors are going to wait and see what’s going to come out in terms of second quarter earnings, and obviously, they want to see how the [coronavirus] case count will progress,” he said.

He said the market has “pretty much recovered” half of the losses it saw at the start of the pandemic. From falling to a historic low of 4,623.42 on March 19, the PSEi has worked its way up and has been trading in the 6,000 level since June 2.

However, from a rapid escalation at the start of the month to reach as high as 6,583.84 on June 9, the PSEi has tempered its movement over the past days, and ended Tuesday’s session at 6,297.78, down 49.65 points or 0.78% from a day ago.

Mr. Narvaez said the primary concern of investors right now is the increasing number of coronavirus disease 2019 (COVID-19) cases in other countries, which hit above 9.1 million confirmed cases across the globe on Tuesday.

The Philippines also continues to see an uptrend in COVID-19 cases, which stood at 30,682 cases as of Monday.

Mr. Narvaez said investor sentiment may likely remain dampened for the near-term, and the market will keep moving sideways until companies report their second quarter earnings next month.

“We are close to the time when companies are going to start announcing second quarter results. I would expect that around mid-July and late July, you’ll start to see a lot of announcements. And as we’ve pointed out, the second quarter will probably be the bottom in terms of overall earnings contraction. So that’s something to watch out for,” he said.

He also said there might be a correction that will spill over until August with the announcement of second quarter corporate earnings.

For its full-year PSEi forecast, BPI Securities maintains an index target of 6,200 by yearend, which Mr. Narvaez said “implies some downside for the market in the near-term.”

The brokerage recommends sectors that may be more resilient amid the stay-at-home environment, such as those in the manufacturing, retail and telecommunications sectors. Its stock picks are Century Pacific Food, Inc. (CNPF), Puregold Price Club, Inc. and PLDT Inc.

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