Investor optimism to buoy market

MANILA, Philippines — Share prices may rise this week as investors are becoming more optimistic, especially with positive developments on a COVID-19 vaccine, analysts said.

The Philippine Stock Exchange Composite index’s immediate support may hover at  6,650, with resistance at 7,000 level, according to 2TradeAsia.com.

Last week, profit- taking dominated the market after several consecutive sessions of strength.

“The PSEi failed to hold the 7,000 level, plunging 378 points to 6,791.  Save for mining and oil, all sector indices dipped, led by the holdings, property and services sectors. Average value turnover, however, rose to P16.4 billion, while average net foreign selling widened to P1.56 billion,” 2TradeAsia said.

Moving forward, 2TradeAsia said market investors are becoming more optimistic especially with positive developments on a COVID-19 vaccine.

“Vaccine orders from AstraZeneca have also reportedly been made, setting up mass vaccination by the second half of 2021. Needless to say, the lining is becoming more visible and it is silver,” 2TradeAsia said.

The government and the private sector have signed an agreement with British drug maker AstraZeneca Pharmaceuticals Philippines Inc. for the supply of 2.6 million doses of vaccine for COVID-19.

Michael Ricafort of Rizal Commercial Banking Corp. said that the market’s immediate major support would be at 6,600 to 6,700 level.

This, he said would help keep intact the latest strong upward momentum over the past month.

“Consistently, there is a gap area at the 6,690 to 6,790 that was abruptly skipped during the strong rally on Nov. 10, which also now serves as the immediate support level,” he said.

The next resistant is at 7,000 to 7,500 levels for the coming days and weeks.

Moving forward, Ricafort said investors would be looking at catalysts in the coming days.

These include progress on the CREATE Bill and other legislative reform measures, any additional measures to further reopen the economy that help recovery prospects and an increase in OFW remittances during the Christmas season.

Further progress on vaccines for COVID-19 would likewise improve economic recovery prospects and global market risk appetite, Ricafort said.