LAST WEEK
SHARE prices closed lower last week, with the main index dropping below 7,200 points, after International Monetary Fund (IMF) lowered its global outlook for this year and 2015.
The benchmark Philippine Stock Exchange index dropped 79.68 points, or 1.1 percent, to close on Friday at 7,167.35 points, while other subindices fell by an average of 1 percent.
On top of the IMF global-growth cut, there were also concerns that the euro zone may again slip to recession, after exports and industrial production of Germany, Europe’s largest economy, fell in August.
The global issues outweigh some of the better domestic news, including the lower inflation rate in September as a result of slower rise in food and nonalcoholic beverages.
Turnover during the four-day trading week slowed by 24 percent to an average of P6.82 billion, while losers led gainers 94 to 82. Foreign investors were net sellers at P8.48 billion, following a heavy sell-off at the start of the trading week.
Other subindices also dropped. The All Shares index shed 32.80 to 4,244.29, the Financials index lost 17.12 to 1,689.63, the Industrial index dropped 98.55 to 11,472.22, the Holding Firms index was down 85.23 to 6,316.28, the Property index fell 29.26 to 2,791.68, the Services index declined 0.54 to 2,111.81 and the Mining and Oil index plunged 288.49 to 16,410.76.
THIS WEEK
TRADERS said prices may stabilize this week following last week’s sell-off, as investors will digest the IMF’s paper, which points to the Philippines may be this year’s fastest-growing economy against its Southeast Asian peers.
The IMF said the country’s economy may grow 6.3 percent for the year, lower than the previous year but still faster than its regional peers.
“Last week’s sell-off was not as ‘bad’ as expected compared to regional peers,” said Jason Escartin, analyst at F. Yap Securities.
“What we find positive is that the index has been receiving robust support as it continues to test support levels amid the substantial drag,” said Gab Aguila, equity analyst at DA Market Securities Inc.
STOCK PICKS
BROKER Regina Capital recommend taking profits on Ayala Corp. after its share price broke its 20-day moving average.
According to its readings, correction on the conglomerate’s stock price will continue and a further decline may send its prices back to its June 2014 levels. Ayala Corp. closed lower on Friday at P709 per share.
On the other hand, the broker said that the investors should watch the stock of power distributor Manila Electric Co. (Meralco) after it broke its 200-day moving average.
“Overall technical readings are bullish with increasing momentum so we expect prices to initiate further advances once we confirm the validity of the breakout,” it said.
It recommend investors to buy on breakouts.
It set a monthly target price at P278 per share on Meralco shares. The stock closed lower last week at P263.20.