Share prices may bounce back this week

MANILA, Philippines -  Local share prices will attempt to bounce back this week after finishing lower last week behind the slower economic expansion of the country in the first quarter.

Analysts see continued sideways trading this week, but mostly with a positive push to be driven by sustained confidence on the local economy.

“While first quarter GDP (gross domestic product) data fell below expectations, the market is still upbeat on recovery prospects for the remainder this year as projects are rolled-out and budgets are deployed. The only counter would be in timing construction, with the rainy season ahead,” analysts from online market research portal 2TradeAsia.com said.

“Overall, investors will keep a tab on joint venture deals that would arise from the administration’s ‘Build, Build, Build’ agenda, including financing concessions and other arrangements,” they said.

Last week, the Philippine Stock Exchange index (PSEi) finished 48 points, or 0.61 percent, lower week-on-week with the first quarter GDP growth of 6.4 percent falling below consensus.

Among the sectors, only holding firms managed to end on a positive note, while services ended with the biggest decline. Losers crushed gainers, 103 to 90.

Net foreign buying, meanwhile, slowed to an average of P54 million from P653 million the previous week, according to 2TradeAsia.com.

Philstocks Financial Inc. senior research analyst Jun Calaycay said the PSEI has consolidated between 7,720 and 7,860 over the week-and-a-half.

“It remains a question of whether the short-term sideways move will hold and in what direction it will eventually break,” Calaycay said.

“Breadth doesn’t look encouraging even as foreign flows, although having slowed, remained on the buy-side last week, the fourth straight and sixth in the last 10. Whatever spooked them from week three to 13 is seemingly overcome,” he said.

For this week, analysts see immediate support at 7,700, while resistance is pegged from 7,800 to 7,850.