PHL shares to move sideways ahead of holiday

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By Arra B. Francia
Senior Reporter

SHARES are seen to continue trading sideways in the days ahead amid a trading holiday in the middle of the week.

The benchmark Philippine Stock Exchange index (PSEi) dropped 0.33% or 26.17 points to close at 7,868.28 last Friday. The main index climbed by 0.42% or 33 points on a weekly basis, lifted by the property counter’s 2.7% jump as investors cheered the prospect of the first real estate investment trust listing by Ayala Land, Inc.

Turnover slimmed by five percent to P6.5 billion on a daily average last week, even as foreign investors supported the market with P416 million in average net foreign buying print.

“The market continues its trend of boring sideways action as it cannot decide whether to go higher or lower. We may see this continue into [this] week as we have only four days of trading due to the holiday in the middle of the week,” Eagle Equities, Inc. Research Head Christopher John Mangun said in a weekly market report.

Financial markets are closed on May 1 for Labor Day.

“I doubt that we will see any major moves from blue chips as the general investor sentiment remains extremely cautious,” Mr. Mangun added.

Online brokerage also cautioned investors to expect volatility in the four-day trading week, noting that there are only a few days left before the May 13 midterm elections.

“For now, selective stores are in play, with scheduled first quarter briefings from index shares MER (Manila Electric Company), MPI) ( Metro Pacific Investments Corp.), AEV (Aboitiz Equity Ventures, Inc.)/AP (Aboitiz Power Corp.),” said in a weekly market note. Meralco will hold its first-quarter briefing on Monday, followed by MPIC, AEV, and AP, all on Thursday.

Overseas, the online brokerage noted that the United States’ Federal Open Market Committee will have its meeting on April 30, prompting debates on whether officials will soon lower key rates.

“Other inflation-related items may be considered, especially with crude prices breaching year-to-date highs at $65/barrel. Overall, these might support a status quo from the Fed, which would help keep borrowing costs at bay,” said.

Eagle Equities’ Mr. Mangun also added that investor sentiment may get a boost should first-quarter gross domestic product (GDP) growth in the US come in better than expected.

GDP increased at a 3.2% annualized rate in the first quarter, the US Commerce department said in its advance GDP report. Growth was also driven by increased investment in roads by local and state governments.

Mr. Mangun placed the market’s support from 7,800 to 7,900, with resistance from 8,000 to 8,140.

“As long as foreign funds come in, the PSEi will stay above its support at 7,800,” Mr. Mangun said.