By Arra B. Francia, Reporter
SHARES are expected to rise in the week ahead, taking cues from the positive finish in August and expectations for listed companies’ plans during last quarter of 2018.
The bellwether Philippine Stock Exchange index (PSEi) added 0.03% or 2.55 points to close at 7,855.71 on Friday. On a weekly basis, the index gained 89.24 points or 1.15%, while climbing 2.4% for the month of August.
“The week’s four-day trade swung between gains and losses, as sentiment took its cue from the latest United States-Mexico accord that could pave the way for a renegotiated NAFTA (North American Free Trade Agreement) deal. After moving within 7,679 to 7,875, the PSEi finished the week 89 points stronger at 7,855,” online brokerage said in a weekly market note.
Holding firms and services lifted the market as they rose 0.35% and 0.12% for the week, respectively. Foreigners recorded average net inflows of P104 million on the back of an average turnover of P7.05 billion last week.
Analysts are looking at a good start for the month of September, with expectations of the PSEi likely breaking the 8,000 resistance level soon.
“We are starting September with a lot of confidence and I have no doubt that the index will break and stay above that 8,000 key level. Breaking above it will start a climb to the upside which may even take us to the previous high of 9,000 before the end of the year,” Eagle Equities, Inc. Research Head Christopher John Mangun said in a weekly market report.
Mr. Mangun noted that springing past the 8,000 level could push the PSEi’s momentum back to the 9,000 mark before the yearend.
“It is all going to come down to an increase in trading volume. Asian emerging markets are proving to be stronger than their counterparts in the west and if foreign investors start to take notice of that, we may see a significant increase in foreign funds,” Mr. Mangun explained.
Meanwhile, said investors will likely come back to the market given the end of the Chinese ghost month on Sept. 9.
“As the ghost month draws near its close, participants’ attention would be swayed to prospects in store for [the fourth quarter], specifically telco, infra, energy, property/tourism and exploration. It would be timely to start reviewing sequels to other M&A angles, given the resonating call to align resources and expertise accordingly,” the online brokerage said.
Investors will also look at how authorities will combat inflation.
Inflation data for the month of August will be released on Sept. 5. The inflation reading from September to December would have to hit 2.7% in order to stay within the government’s 2-4% range. The local central bank last Friday however said it predicts August inflation to end at 5.9%, faster than July’s 5.7% figure. placed the PSEi’s immediate support at 7,800, with resistance from 7,950 to 8,000.