Local shares expected to decline on profit taking
By Revin Mikhael D. Ochave, Reporter
SHARES are expected to decline this shortened trading week as investors will likely book their profits before the holiday break.
The 30-member Philippine Stock Exchange index (PSEi) ended Friday’s trading at 7,272.80, lower by 25.22 points or 0.34% from the previous session.
On a weekly basis, the main index improved 0.37% or 26.64 points, continuing its upward trend from the last trading week.
Average value turnover rose 10.4% week on week to P9.9 billion, while average net foreign selling widened 237% to P760 million.
Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco projected a downward bias for the market in the coming days, saying the PSEi might test the 7,150 support level, with the local bourse still overvalued and vulnerable to profit taking.
“As of this past week’s closing, it is trading at a price to earnings ratio of 21.8x, above its 2015-2019 average of 18.4x. Investors may book gains ahead of the upcoming holidays, especially if there would be no positive catalyst for the market,” Mr. Tantiangco said in a mobile phone message.
Online brokerage 2TradeAsia.com said in a market note that investors will watch the ongoing spread of the coronavirus disease 2019 (COVID-19) in the country and its projected spike during the holiday season.
“As experts are projecting the likelihood of 4,000 cases per day in Metro Manila, concerns from a market standpoint is anchored on whether authorities will impose anew stricter social restrictions,” 2TradeAsia.com said.
“There should be close consideration on turnover buildup in the coming sessions, as the mood turns to last minute shopping, especially from funds intending to do some year-end window dressing,” it added.
However, Mr. Tantiangco said a catalyst that may push the market upward this week is progress on the domestic availability of a COVID-19 vaccine.
Reuters reported that the Philippines can secure some four to 25 million doses of COVID-19 vaccines from Moderna, Inc. and Arcturus Therapeutics Holdings, Inc.
These two companies will be ready to supply the vaccines from the third quarter of 2021, once it secures approval from the Philippine government, based on a statement from Jose Manuel G. Romualdez, the country’s ambassador to the United States.
Companies that are also expected to supply vaccines to the Philippines include Pfizer, AstraZeneca, Sinovac, and Novovax, among others.
2TradeAsia.com put the market’s immediate support at 7,100, resistance at 7,300, and secondary resistance at 7,450.
“Trading range seen for the market this week is from 7,150 to 7,500,” Mr. Tantiangco said.
