Market seen trading sideways

MANILA, Philippines — Local equities are seen trading sideways this week as thin trading volume is expected to persist.

The stock market will have no trading today due to barangay and Sangguniang Kabataan elections and will return to regular trading tomorrow.

“It is a short trading week due to elections and we may see thin trading. Even on Friday, volume improved to P5.6 billion, but still short of year-to-date average of P8 billion turnover,” IB Gimenez Securities Inc. head of research Joylin Telagen said.

Last week, the Philippine Stock Exchange index gained by 205 points, or 2.73 percent, week-on-week to settle at 7,752 led by property and services.

Turnover, however, remained thin averaging P5.8 billion throughout the week.

“Despite having only four days of trading next week due to the barangay elections, we are seeing a lot of optimism as the index refuses to break below the 7,500 support level. There is strong indication that the index has finally found a bottom at 7,500,” Eagle Equities head of research Christopher Mangun said.

“My biggest concern, however, is still the lack of trading value. A big positive is the heavy inflow of funds into the blue-chips. Most of Friday’s gains came because of the lack of sellers which allowed buyers to push prices up on very little volume,” he said.

Mangun said should buying pressure persists this week, the index may test its next resistance at 7,830.

However, he said there is also the possibility that the index would continue to consolidate between 8,500 and 8,700 as it builds momentum to test the next resistance.

2TradeAsia.com sees immediate support this week at 7,700, while resistance is between 7,850 to 7,900.