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Sunday, March 18, 2018

Earnings, second liners to drive market


By James A. Loyola

Corporate earnings will be the main market drivers this week and stock market analysts said that investors will closely watch companies that will be disclosing their 2017 results as well as announce their plans for 2018.

“Several listed firms are slated to hold their briefing this week to update shareholders on 2017 and prospects in store for the year,” said 2TradeAsia.com.

It noted that among the biggest firms that will make announcements are Semirara Mining and Power Corporation, BDO Unibank, Manila Electric Company, and Metro Pacific Investments Corporation which have a combined weight of 12 percent of the Philippine Stock Exchange index (PSEi).

However, Abacus Securities Corporation technical analyst Lawrence Gonzaga recommended a sell if the PSEi rallies, particularly stocks such as Meralco, PLDT, Wilcon Depot and Megaworld. Eagle Securities Head of Research Chris Mangun added that, “we will continue to see more action in second-liners and speculative stocks as we wait out the foreign selling.”

Regina Capital Development Corporation President Marita Limlingan said that, “next week, there may be some repositioning ahead of window dressing. Earnings will be the main driver, and some speculation as to the MSCI and FTSE rebalancing (sometime during the beginning of March) may fuel trading activity.”

“The minor support of 8,500 has been broken so many will be watching whether we can hang on to the next major one at 8,400,” said Limlingan.

Mangun said “we may have broken the 8,500 support level but I believe we will continue to trade sideways in the following weeks between 8,420 and 8,700. If we do break below 8,420, then we may see it go all the way down and test support at 8,330. Building a base at these levels are important for the market before we can try and test the 9,000 level.”

BDO Unibank Chief Market Strategist Jonathan Ravelas pointed out that investors have remained sidelined and cautious as they have yet to get comfortable with the higher interest rates and higher inflation.

“They are also awaiting for fresh leads from the economy and markets to justify accumulation of stocks,” added Ravelas who expect the market to range between the 8,350 to 8,700 levels in the near-term.

“Immediate support and resistance is seen at 8,350 and 8,800 levels, respectively,” he said.

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