Stocks to move sideways as COVID-19 cases rise

SHARES are seen to move sideways this week amid surging coronavirus disease 2019 (COVID-19) cases in the country.

At the end of Friday’s trading, the bellwether Philippine Stock Exchange index (PSEi) dropped 46.41 points or 0.63% to close at 7,261.34 while the broader all shares index fell 14.81 points or 0.38% to finish at 3,855.30.

Week on week, the main index rose 250.23 points versus the 7,011.11 close recorded on Jan. 7.

Cristina S. Ulang, First Metro Investment Corp. head of research, said the local market is projected to go sideways as investors await COVID-19 cases in the country to peak.

“Any sign of such will push the market higher in the approach to the Chinese New Year which is a seasonally strong period for share prices,” Ms. Ulang said via Viber message.

On Jan. 15, the Department of Health announced that the Philippines recorded a new record high for its single-day tally of new COVID-19 cases at 39,004, bringing the total number of infections to 3,168,379.

Online brokerage 2TradeAsia.com said in a market note that the country’s daily COVID-19 case tally will remain a catalyst for the market’s performance this week.

“Average value turnover rose to P6.22 billion, up 11.78% week on week, while foreigners turned to net buyers for P10 million on average (versus) P90-million average net selling last week,” 2TradeAsia.com said.

“After reaching the highest daily COVID-19 cases on record this week, there are arguments that the country has reached/near to reaching the crest in Omicron’s infection curve,” 2TradeAsia.com said.

Timson Securities, Inc. Trader Darren Blaine T. Pangan said in a mobile phone message that market participants may be looking forward to the listing of residential developer Haus Talk, Inc. on PSE’s small, medium, and emerging board on Jan. 17.

Haus Talk has priced its initial public offering shares at its ceiling of P1.50 apiece.

With the P1.50 per share price tag, the company may raise up to P750 million from the sale of 500 million primary common shares.

“Investors may digest the announcement that the National Capital Region (NCR) will remain under Alert Level 3 until the end of the month, instead of reverting to stricter movement restrictions,” Mr. Pangan said.

Malacañang last week said NCR will remain under Alert Level 3, along with other areas across the country, from Jan. 16 to Jan. 31 following the surge in COVID-19 cases seen to be caused by the Omicron variant.

According to 2TradeAsia.com, the PSEi’s immediate support is seen at 7,000, while resistance will range from 7,400 to 7,500.

“The closest resistance that the index may retest this week lies at the 7,450 area, while immediate support may be pegged at 7,000,” Timson’s Mr. Pangan said. — Revin Mikhael D. Ochave