Last week
Share prices went up, snapping two successive weeks of losses, despite a disappointing second-quarter GDP print.
The benchmark Philippine Stock Exchange index gained 53.91 points to close at 6,290.35 points.
Investors may have been encouraged by the July inflation print as both headline and core inflation rose at a slower pace. However, Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financials Inc., noted that they remain elevated.
‘June employment figures, in real terms, have posted an increase both month-on-month and year-on-year. However, our second quarter GDP data has posted slower expansion implying that the local economy continues to lose growth momentum.’
Average daily trading reached P5.23 billion, with foreign investors, who cornered 53 percent of the trades, were net sellers at P910.9 million.
Other sub-indices ended mixed. The broader All Shares index gained 23.35 points to close at 3,418.40 points, the Financials index lost 14.90 to 1,893.64, the Industrial index rose 80.71 to 8,130.14, the Holding Firms index was down 9.25 to 4,464.63, the Property index fell 19.49 to 1,915.54, the Services index climbed 94.62 to 3,475.23 and the Mining and Oil index soared 1,441.30 to 18,305.30.
For the week, losers outnumbered gainers 110 to 103 and 28 shares were unchanged.
Top gainers were Dominion Holdings Inc., Ferronoux Holdings Inc., Anglo Philippine Holdings Corp., Paxys Inc., Makati Finance Corp., Atlas Consolidated Mining and Development Corp. and East Coast Vulcan Mining Corp.
Top losers, meanwhile, were ENEX Energy Corp., Medco Holdings Inc., Boulevard Holdings Inc., NiHAO Mineral Resources International Inc., Suntrust Resort Holdings Inc., Metro Alliance Holdings and Equities Corp. B shares and MRC Allied Inc.
This week
Share prices may fall this week as investor sentiment is seen to remain cautious moving forward amid the latest developments between the US and Iran.
Tantiangco said the situation between the United States and Iran remains uncertain as the two declare ‘contradicting narratives.’
‘The peso has been improving its position against the US dollar but remains weak. Meanwhile, local treasury yields have been easing but still elevated. If both continue in their current direction, then it may give the market a boost.’
Broker 2TradeAsia said it expects another rate hike by the Bangko Sentral ng Pilipinas in August, though growth concerns have shifted the balance more toward the status quo.
‘We expect this tension to show up less as a skipped hike and more as a shorter overall tightening cycle, with BSP moving closer to done after August rather than extending hikes through the fourth quarter as some desks still project.’
Tantiangco said chartwise, the local market is currently testing the 10-day exponential moving average and is having a hard time securing position above the said line.
Trading range is still seen from 6,150 points to 6,400 points.
Stock picks
Philstocks said shares of Century Pacific Food Inc. have reached its initial price target, delivering a return of more than 7 percent.
Its technical readings showed momentum is not yet aggressive and the short-term moving average has crossed above both medium and long-term averages, a potential golden zone might materialize in the near term if the long term finally penetrates below the 50-day moving average, the broker said.
‘A successful breakout from the P32.50 trading range suggests the stock may have room for further upside, with P33.65 and P35.04 as the next resistance levels to watch,’ it said.
Century Pacific shares closed last week at P32.60 apiece.
Meanwhile, it advised to trade shares of Jollibee Foods Corp. (JFC), as the stock has rebounded 25 percent from its June 22 low, reflecting improving investor sentiment amid the easing of geopolitical tensions.
The company delivered a solid first-quarter performance, with revenues increasing 9 percent year-on-year to P76.5 billion and systemwide sales growing 10.3 percent, supported by an 8-percent growth in the Philippines and 13.5-percent growth in its international business.
‘JFC also continued to execute its long-term expansion strategy, opening 181 new stores, including 149 international locations, further strengthening its global presence,’ the broker said.
Jollibee shares closed last week at P150.60 apiece.