Quarter-end window dressing likely to lift stocks
QUARTER-END WINDOW dressing is likely to provide investors impetus to buy local stocks and help the Philippine Stock Exchange index (PSEi) break from range-trading, a movement that has marked the main gauge’s direction for the past weeks.
Mr. Roxas said the next few days make up the period when companies schedule their “window dressing” to cover the end of the first half.
“Portfolio realignment as a result of the quarter-end season would likely take center stage this week, as fund managers prepare their refreshed basket weighting for the (second) semestral wave,” said 2TradeAsia.com for its outlook for the last week of the month, the quarter and the semester.
The online arm of F. Yap Securities, Inc. said interest might be skewed towards sectors that are set to benefit during the fourth-quarter drive, especially infrastructure and allied construction-related undertakings as well as consumer-spending plays.
It advised investors to position during intraday lulls and “go for stocks with convincing growth stories that will support improved dividends in the long term.”
“Immediate support is 7,750, resistance 7,870-7,900,” said 2TradeAsia.com.
In the first half, 2TradeAsia.com said local equities managed to sustain their upward channel, despite geopolitical risks and “other externalities.” The firm said it had tracked the PSEi trend at the tailend of 2016 towards its present level.
During this review period, investors saw terrorist elements -- the Maute clan -- taking siege of Marawi City, prompting President Rodrigo R. Duterte to declare martial law in Mindanao, or a third of the country’s geographic division.
2TradeAsia said its view is supported by investors’ “firm belief” in the country’s sound fundamentals and the country’s ability to weather political or economic storm.
It said as the market prepared to gather momentum for its next climb, “a healthy checklist is essential” to test the resilience of monetary and fiscal policies, “including the need to recalibrate, if necessary.”
2TradeAsia.com added that even if the country’s inflation outlook had been adjusted to 3.1%, “growth remains well supported, and value plays in equities are present.”
But for Jonathan L. Ravelas, BDO Unibank, Inc. chief market strategist, the market would remain range-bound this week. He placed this range at the 7,700 to 8,000 levels.
Last week, the PSEi finished at 7,814.17, or lower by 0.86% from a week prior, and by 0.68% from its close four weeks earlier. The wider all-shares index finished at 4,679.29, weaker by 0.34% compared with the earlier week and lower by 0.23% from with its closing four weeks ago. -- Victor V. Saulon