Business

In search of beautiful stocks, PSEi can try again 7,000

The stock barometer could test the 7,000 mark this week as investors pick up index stocks that have not yet benefited from the recent recovery, in parallel with the end of the quarterly windows.

Last week, the Philippine Stock Exchange Index (PSEi) rose 99.13 points, or 1.44 percent, topping 6,950.51.

“I think the market will still be strong, especially because it is the end of the month. We may see some window dressing, ”said Joseph Roxas, president of Eagle Equities Inc.

At the same time, Roxas said there were index stocks that could still be attractive to investors looking for backward stocks. Eg. Could DMCI still have an upward effect based on a yield of about 7.5 percent, even at current prices, he said. Other index stocks like SMC have also just started moving higher, he added.

Rachelle Cruz, research manager at AP Securities, said market sentiment remained cautious but still positive as the government expects the arrival of over 10 million doses of COVID-19 vaccines in the coming month.

“Investors will also look into possible window dressing activities when the second quarter of 2021 closes, as well as the government’s decision on quarantine restrictions before the end of June,” Cruz said.

“Overall, we expect PSEi to test the latest peak at 7,001 with the next resistance levels at 7,159. Meanwhile, support is still tied to the 6,700 levels, ”she said.

Last week, Cruz noted that the main index, which was consolidated near its recent peak, as Bangko Sentral ng Pilipinas, as expected, kept its interest rates stable. Market participants also recognized the decline in COVID-19 cases in the country, where the seven-day average now ran at 5,542 compared to the peak of 10,840 in April last year, Cruz added.

For BDO Unibank strategist Jonathan Ravelas, the PSEI’s sustained fall below 6,700 could signal a further retreat to 6,300 to 6,500 levels, which in turn could “rethink the bears to play.”

—Doris Dumlao-Abadilla INQ

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