Manila’s stock market to rebound

After a wave of selling last week, the market is due for rebound as investors would buy back on select blue chips.

“We could see the market make a technical rebound that could get a helping hand if the anxieties in Libya die down, says AB Capital Securities.

 “Sentiments should improve once the worries of a long drawn Libyan civil war will not materialize as Libyan leader Muammar Qaddafi’s hold on power is growing weaker by the day.”

“Major oil producing countries are also downplaying the Libyan situation as they have pledged to provide more oil to the markets if there will be a reduction in oil prices,” says AB Capital. Local investors would get guidance from companies regarding their 2010 performances and their outlook for this year.

Among those scheduled to release their results this week are Aboitiz Equity Ventures (AEV), Aboitiz Power Corporation (AP), the Manila Electric Company (MER) and Metro Pacific Investments Corp. (MPI). AB Capital expects the market, which overcame last week’s strong down ward momentum pressure, was able to maintain certain major support levels last week.

“The first important support that the PSEI has managed to stay above of is its recent low of around 3,720. The local main index’s next major support is at its one year exponential moving average line, which is currently priced at 3,680.”

BPI Securities noted the PSEi managed to end its five-day losing streak closing at 3,737.04, up 6.2 points as investors took their cue from the oversold level of the index to bargain hunt.

The market is likely to consolidate in the near term, trading between 3,680 – 3,750, with support pegged at 3,700. PRC and ALI are reported to have joint plans of redeveloping the 21-hectare Sta. Ana horse racetrack located at the residential area along the borders of Makati and Manila.

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Market players to cash in for profits

Market players are likely to cash in for profits following a rebound on Friday
as the composite index gained 8 points.

Stock analyst Prince Anthony Yeung of AB Capital Securities expects trading to
slow down a bit as investors focus on companies that are scheduled to release
their figures for the third quarter.

Investors took a wait and see attitude as the earnings season kicks this next
week. There have already been a few companies that have announced third quarter
earnings but more should come next week, says Yeung.

Among those scheduled to release their corporate earnings are index issues such
as PLDT, ICTSI, and the Aboitiz group.

Yeung advised investors to stick to companies that are seen to report not only
impressive numbers for the third quarter but also rosy outlooks for 2011.

“From recent price movements it would seem that the likes of ICT, AP, Alliance
Global (AGI), and SCC are expected to reveal great third quarter figures,”
saysYeung.

“These stocks have been moving higher in the past weeks. The market is seen to
move flatly this week. The bias will come from whether the results reported will
meet expectations.”

BPI Securities noted that last Friday’s session closed on a lackluster trading.
Value turnover stood at P5.5 billion with a net foreign buy of P216 million.

The most active issues were PLDT, AGI, EDC, Megaworld, SM, MPI, Banco de Oro and
URC.. Advances outpaced declines 73 to 61 while 43 were unchanged

Week on week, the composite index dropped 18 points. BPI also noted that the
market movement has been limited to only selected stocks albeit a number of
corporate income results has been released.

Adding to the tempo was the recomposition of PSEi Index wherein stocks like GMA,
SECB and SMC were taken out and replaced by DMC, JGS and FGEN.

Stocks to consolidate in near term

Philippine share prices are likely to consolidate in the near term after a market correction following a sharp rally.

Analyst Maria Arlysa Narciso of AB Capital Securities expects the market to be flat to a little lower as investors opt to stay on the sidelines or continue taking profits.

“This week may not bring about heavy buying activity in the main index. Gains may again be limited to a few stocks similar to the past week,” says Narciso.

“Economic data may serve as support, but market behavior will most likely depend on individual developments in the listed stocks. The PSEi has taken only small leads from the US markets,” says Narciso.

BPI Securities noted that the value turnover managed to remain above the P5 billion mark with a net foreign buy of P136 million.

The market able to withstand a bit despite Asian counterparts retreated on report US jobless claims unexpectedly increase, says BPI.

Week on week, the PSEi dropped 20 points as investors cash gains in preparation for the upcoming Cebu Air’s IPO.

The correction which everyone has been waiting for finally took place last week as investors took profits following successive gains of the index.

Although there were several corporate developments which could have encouraged more buying activity, the behavior in the market was based more on a technical standpoint, says Narciso.

“The outlook both for business and the economy has been improving. Gross domestic product (GDP) projections which are in line or sometimes even more than the government’s forecast prove the growing strength of the economy.”

“The 36.6% improvement in exports for the month of August also leads us to believe that there is recovery in the sector. Leading the growth is electronics followed by merchandise. Manufacturing for July also showed better figures.”

“This improvement in trades, manufacturing, and an 8% target growth for remittances will be the drivers for achieving a 6% full year GDP or maybe even more,” says Narciso.

Market players eye bargaing hunting on stocks

Market players are likely to look for bargain stocks following a wave of selling on Friday after the composite index hit another all-time high on Thursday at 4,245 points.

The Philippine stock market shed 8 points on Friday with the most active stocks traded such as SM, PLDT, Megaworld, DMC, BDO and Alliance Global.

Week on week the PSEi gained 125 points of 2.9 percent as foreign activities registered a net buy of P1.6 billion while the daily value turnover continued to stay above P5 billion, says BPI Securities.

Pres. Aquino’s first 100 days report added to the positive sentiment on top of Bangko Sentral’s declaration that the country’s forex reserve hit an all time high of $53.5 billion while interest rates remain at the lowest level of 4% and 6% respectively.

BPI expects most investors to divert their cash on Cebu Air’s upcoming initial public offering (IPO) while waiting for the third quarter corporate income results.

Analyst Prince Anthony Yeung of AB Capital Securities says while the PSEi continues to defy expectations, there seem to be signs that it is running out of reasons to move higher.

“The economy remains a strong foundation. Prices, though, are already high. It is becoming more and more difficult to discover stocks that still offer significant upside,” says Yeung.

Yeung expects investors to be more picky when it comes to buying stocks. “The previous week’s best performers – Alliance Global, Aboitiz Power and Semirara Coal — all had relevant and positive developments to buoy their stock prices.”

“Investors want to see further developments in the stocks that they are going to buy. This includes second and third liners that may have their own plays or stories to help attract buyers,” Yeung added.

Yeung says he expects trading activity to hover around P5 billion. For now, stocks in the spotlight include those in the power and mining sector.

Philippine stock market posts record gains

Investors are likely to cash in for profits after the Philippine stock market posted a record high last week as the volume of trading hit the P6 billion mark.

BPI Securities noted that trading on Friday closed to its highest level as the growing numbers in fundamental and persistent positive bias on economic outlook continued to dominate the local market.

The market advanced 97 points on Friday led by the property and financial sectors. Net foreign buying eased down to P684 million.

Week on week the bourse gained 168 points, up 4.3%.  The market is expecting to test the 4,000 level though profit taking along the way is inevitable, says BPI.

The most active stocks were PLDT, Metrobank, Banco de Oro, AGI, EDC, Ayala Corp., SM Prime Holding and AP.

The Asian markets also rallied on optimism that world economy will continue to grow.

Analyst Arlysa Narciso of AB Capital Securites noted that a strong rally last week despite the lack of convincing factors to back up such move.

“Although positive economic news were abound, there was nothing new and exciting about it. The advance was undoubtedly due to foreign leads and the gains garnered by a few companies,” says Narciso.

“So far, all indicators are optimistic and pointing to an advance. The support is at 3,550 or the lower band of the PSEi’s channel line while a probable resistance is at 3,870.”

Narciso said that investors feasted on developments overseas and tracked the gains in Wall Street.

The local market recorded successive gains to end the week with 176 points from its previous level. It reached a new year to date high with its sharp advance last week. Daily volume average reached 1.38 billion with an average value of P5.11 billion.

Aside from the economic forecasts provided by the government, other rating agencies and organizations have likewise given their projected growth of the economy, says Narciso.

“The strong growth recorded in the previous quarter called for a review in forecasts. This fuelled the optimism of investors and confidence in the economy. Other than such news, there was nothing else significant to catch investors’ attention. This led them to seek leads in foreign developments,” Narciso added.

Profit-taking seen after a strong rally

Market players are likely to cash in for profits after a strong rally last week with a 68-point gain.

“Although the positive economic news were abound, there was nothing new and exciting about it. The advance was undoubtedly due to foreign leads and the gains garnered by a few companies,” says analyst Maria Arlysa Narciso of AB Capital Securities.

 All indicators are optimistic and pointing to an advance. The support is at 3,550 or the lower band of the PSEi’s channel line while a probable resistance is at 3,870, says Narciso.

 BPI Securities noted that the market continued to rally on Friday advancing 68 points. Bullish sentiment outplayed pessimist as outlook for the world economic recovery strengthens.

 The most active were Metrobank, PLDT, SM, EDC, Ayala Corp., DMC, MPI, Megaworld, and Filinvest Land.

 Trading volume reached the P7 billion mark. Investors have taken advantage of the increased liquidity in the market as corporate profits continued to post higher gains versus what was reported on the same period last year, says BPI.

 Week on week the bourse gained 176 points, up 4.71%. This has been the highest level since 2008 and unexpectedly PSEi landed in top 10 as one of the best performing markets in the world.

 Narciso noted that aside from the economic forecasts provided by the government, other rating agencies and organizations have likewise given their projected growth of the economy.

 The strong growth recorded in the previous quarter called for a review in the forecasts. This fueled the optimism of investors and confidence in the economy, says Narciso.

 “Other than such news, there was nothing else significant to catch investors’ attention. This led them to seek leads in foreign developments.”

 Narciso said certain stocks played a key role last week. EDC was strongly traded for the week and took the top spot in the positive movers. The stock went up by a remarkable 8.7% to P5.02 per share.

 SM, the holding firm of the Sy family, was a market performer last week. The firm is looking into expanding its investments for infrastructure and even public utilities. It likewise looking into opportunities to develop a part of Fort Bonifacio into a residential and commercial area.  SM closed at P493 per share or up by 4.9%.