LAST WEEK
SHARE prices managed to post a small increase last week despite most of its gains being wiped out on global jitters after the United Kingdom opted to exit the European Union (EU).
The benchmark Philippine Stock Exchange index (PSEi) gained 7.65 points to close at 7,629.72 points.
Most indices were down, including the Mining and Oil index that took a beating this week.
The main index was up during the first two days of the week, but fell at the latter part, especially when Britain voted to leave the EU.
“Many investors were positioned for the UK to stay within the EU, and thus, a knee-jerk reaction took place. The pound sterling dipped to 1985 lows, oil prices tumbled, global equities dipped, and the safe-haven commodity gold rallied,” AB Capital said in its report.
On the domestic front, the Mining and Oil shares were hammered in reaction to the appointment of Gina Lopez, a staunch antimining advocate, to become the environment secretary.
The Mining and Oil index shed 1,006.16 points, or 8.5 points, to close the week at 10,847.21 points.
Other subindices, meanwhile, were mostly down. The broader All Shares index shed 6.63 points to 4,542.64; the Financials index was down 6.71 to 1,728.81; the Industrial index fell 90.02 to 11,751.77; the Holding Firms index gained 44.02 to 7,521.29; the Property index rose 2.81 to 3,318.35; and the Services index declined 1.20 to 1,601.01.
Foreign investors were net buyers at 4.31 billion, while average value for the week was at P7.75 billion.
Losers edged out gainers 149 to 72, and 24 shares were unchanged.
Top gainers for the week were Apex Mining Co. Inc., F and J Prince Holdings Corp. B, BDO Leasing and Finance Inc., Oriental Petroleum and Minerals Corp. B, Berjaya Philippines Inc. and Vivant Corp.
Top losers were Keppel Philippine Holdings Inc. B, AG Finance Inc., Manila Mining A and B, Yehey Corp. and Philex Petroleum Corp.
THIS WEEK
SHARE prices are expected to become volatile this week, still as a result of the UK’s decision to leave the EU.
PSE President Hans Sicat said the outcome of the referendum has a negative impact on various asset classes and currencies, including the Philippine market, a foreseen reaction in a “Brexit” case which may prevail for the next few days as markets settle.
“Medium term, however, we think the Philippine market will not be adversely affected, as it is supported by the country’s solid economic fundamentals and the inherent strength of the local financial market,” Sicat said.
AB Capital said there will be profit-taking toward the 7,480 and 7,450 levels, before retesting the 7,800 resistance level.
“We remain bullish, mainly in the form of contrarian play. The reasons are the president-elect will assume his presidency on June 30, which may cause a positive reaction as we have seen last month; window dressing may happen at month end, driving index-issues prices higher; and the momentum in foreign buying may continue,” it said.
Luis Limlingan, managing director of Regina Capital and Development Corp., said volatility is a major threat, but this would be an opportune time for traders and investors, especially on those stocks that have reached their oversold levels.
Immediate support of the PSEi is at 7,530 to 7,580, and resistance level at 7,750 to 7,800, according to 2TradeAsia.com.
STOCK PICKS
BROKER Regina Capital raised a technical buy on the stock of Megaword Corp., the property-development firm of businessman Andrew L. Tan, after it broke its resistance level of P4.60 last week. Its technical analysis showed follow-up rallies to P4.80 to P5 per share, the stock’s new resistance level.
“In case of pullbacks, P4.40 is a good area to accumulate positions,” the broker said.
Megaworld closed at P4.50 on Friday.
Prices of Semirara Mining and Power Corp. were volatile last week, falling sharply, but then rebounded after hitting the six-month support of P114.
“Short-term technicals still show bearish signals, but notice that price momentum is not high enough to sponsor more declines,” it said.
Semirara closed last week at P117.