Stocks to test fresh highs after last week’s record

POLITICAL ISSUES here and abroad are set to take center stage this week as the country observes the 45^th anniversary of the declaration of martial law at a time when tension in the region remains high after North Korea’s missile test.

Last week, the Philippine Stock Exchange index (PSEi) closed Friday’s session at a new high of 8,180.85, up 35.94 points or 0.44% from Thursday’s record close of 8,144.91.

“Notably, the PSEi bottomed out at our indicated support of 8,105 before rallying all the way to the top,” said RCBC Securities, Inc.

The all-shares index also finished higher at 4,836.33, up by 20.42 points or 0.42%. Five of the six sectoral counters closed higher, led by the property sector’s 1.29% gain. Value turnover for the day amounted to P11.18 billion with 1.18 billion shares traded.

Since the start of the year, the PSEi has gained 19.6%, the bourse said.

In the coming days, analysts said investors will continue to focus on geopolitical issues, with the PSEi also likely to retest new highs following last week’s records.

“Attention would gyrate between geopolitical headlines in the region … as well as trail from local headlines on the possibility of Martial Law,” said the research team of 2TradeAsia.com, the online arm of F. Yap Securities, Inc.

Focus would be on the next move of the 15-member United Nations Security Council, which on Monday last week passed a resolution unanimously approving sanctions aimed at responding to North Korea’s latest missile and nuclear test.

This came after Kim Jong Un’s regime tested what is believed to be its most powerful nuclear bomb yet.

The resolution is seeking to slash imports of refined petroleum products to 2 million barrels a year, ban textile exports and tighten inspections of ships that are believed to be loaded with cargo in breach of sanctions.

In the Philippines, various groups have urged Filipinos to participate in various protests on Sept. 21, a move that has drawn the Palace to say that it might consider declaring martial law in the whole country if street movements become fiery.

“Having breached as much as 8,180 however, local equities could re-test trouncing 8,300 with strong support pegged at 8,000,” said 2TradeAsia.com.

It said the “macro driver is still on the Philippine’s growth story.”

“Immediate support is 8,100, resistance 8,200-8,270,” it said.

2TradeAsia.com said domestic liquidity indicators remain upbeat, as the Treasury bureau’s latest Treasury bill auction was 3.5 times oversubscribed.

It said the extra boost in the local capital market would come from completion of Energy Development Corp.’s tender offer, the block sale in Bloomberry Resorts Corp. and the sale of International Container Terminal Services, Inc.’s treasury shares.

“All these coincide with the end of the ‘ghost month’ period, which should improve investors’ appetite to accumulate,” it said. — Victor V. Saulon