Shares to move lower ahead of Holy Week break

By Arra B. Francia
Reporter

SHARES MAY edge lower in the following days as investors take a break for the upcoming Holy Week.

The bellwether Philippine Stock Exchange index (PSEi) firmed up 0.24% or 19.05 points to close at 7,873.18 last Friday. However, it was down on a weekly basis by 0.6% or 47 points, weighed down by the 2.5% decline in mining and oil and a 1% drop in services.

Turnover slowed by 1.53% to P5.54 billion. Net foreign buying persisted for the week, albeit 21% lower to P573 million.

“Investors may continue to sit on the sidelines as we go into to the holiday season and maybe wait as long as after the election in May. Because of this, we may continue to see the index go lower,” Eagle Equities, Inc. Research Head Christopher John Mangun said in a market report.

Mr. Mangun noted that the PSEi has held its support level at 7,840 in the past two weeks, but has yet to break above its resistance of 8,000.

“The general investors sentiment has gone from “cautious” to “extremely cautious” as investors are probably anticipating an event that would be negative for the market or possibly waiting until the end of an event that could go either way,” he explained, noting that this event could be the upcoming midterm elections.

“The bottom line is local investors are staying away indefinitely and this will cause the market to go lower.”

Meanwhile, online brokerage highlighted the slower inflation result in March. The Philippine Statistics Authority reported on Friday that headline inflation last month stood at 3.3% — lower than the market consensus of 3.5%.

“For now there’s room to welcome the outcome, as tamer prices will induce consumer and investment spending,” said, although noting that the impact of El Niño on agriculture and water could still affect inflation moving forward.

also noted that investors may change their portfolio mix in the second quarter.

“Build-up in local political campaign plus expected bond float from some of the market’s large caps might prod changes in portfolio mix, at least over the second-quarter run. Special emphasis could divert part of the liquidity on coupon returns from corporate bond floats, especially for investors that have little appetite for risk,” the online brokerage said.

Investors are also seen to look forward to shareholders’ meetings lined up for the month, most of which will happen after the Holy Week break from April 18 to 19. said this could drum up excitement on corporate expansions, dividend declarations, and other capital-raising exercises.

Eagle Equities’ Mr. Mangun placed the PSEi’s support level from 7,800 to 7,900, with resistance from 8,000 to 8,140.

Financial markets will be closed on Tuesday for the Araw ng Kagitingan holiday.