LAST WEEK
THE local equities market suffered its biggest decline since 2013 during the start of the week as it tracked global sell-off.
The benchmark Philippine Stock Exchange index lost 180.17 points, or 2.48 percent, to end the week at 7,098.81.
Early in the week, the main index lost 487.97 points or a drop of 6.7 percent, the most in its history in terms of points and the 11th worse in terms of percentage.
The sell-off was triggered by the disappointing manufacturing data from China which came out last week, suggesting that its economy is slowing down more than expected.
The main index recovered in the following days, partly as a result of the announcement of the country’s gross domestic product, which grew faster in the second quarter from the previous three months, but still slower than last year’s. The recovery, however, was not enough to offset its losses.
Foreigners were net sellers at P11.2 billion as they dumped Philippine stocks all weeklong even as prices recovered. Year-to-date, foreign investors are also net sellers at P11.01 billion.
All other subindices closed lower by at least 1 percent. The All Shares index lost 102.04 to 4,056.08; the Financials index was down 35.51 to 1,551.82; the Industrial index declined 98.24 to 10,978.06; the Holding Firms index fell 105.18 to 6,502.32; the Property index shed 87.46 to 2,907.44; the Services index plummeted 125.35 to 1,875.9; and the Mining and Oil index plunged 206.06 to 11,127.84.
There were 166 losers as against 58 winners and 21 shares were unchanged.
The week’s top gainers were Liberty Telecoms Holdings Inc., Seafront Resources Corp., Philex Petroleum Corp., Century Peak Metals Holdings Corp. and First Abacus Financial Holdings Corp., while top losers were Keppel Philippines Properties Inc., Chemical Industries of the Philippines Inc., Pacifica Inc., Oriental Petroleum and Minerals Corp. B and Suntrust Home Developers Inc.
THIS WEEK
SHARE prices are expected to continue their rally this four-day work week but traders advised to be cautious on trading as selling pressures are still there.
“We expect the index to continue its rallies this week, testing resistance levels at 7,100 to 7,270, but keeping in mind that the recent breakdown put a lot of selling pressure and together with high volatility readings, taking a very cautious approach is advised during this week’s trade,” said Luis Limlingan, managing director at Regina Capital Development Corp.
Jason Escartin, equity analyst at F. Yap Securities Inc. said investors may buy consumer-related companies.
“As the country drives into the ‘ber’ months, opportunities in the consumer sector may merit a closer look. With household consumption comprising two-thirds of the local economy, the seasonal uptick may bode well for consumer-related shares,” he said.
Immediate support of the main index is placed at 7,000 points and resistance 7,200 to 7,300.
STOCK PICKS
SHARE price of Lopez-led First Philippine Holdings (FPH) Corp. stabilized above P65.50 support but is yet to stage an oversold rally, broker Regina Capital Development Corp. said.
“Initial resistance at P75.20 needs to be overcome or else we are to expect heavier downswings to P61,” it said, recommending to sell the stock during its rallies.
FPH closed last week at P70 per share.
The broker said that Ayala Corp. reached its minimum price target as it formed its weekly support level at P700 per share.
The broker, however, said there is still “bearish bias” on the stock and recommended to sell their holdings at the current levels.
“Best-case scenario would be a retest of its breakdown point at P745 but unlikely to breach this level,” it said.
Ayala Corp. closed on Friday at P738.
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