Index seen to keep upward trend

MANILA, Philippines — Share prices are expected to continue their upward trend, with the next resistance levels for the Philippine Stock Exchange Composite index (PSEi) seen at  7,311.21, 7,500  and 7,800, according to Rizal Commercial Banking Corp (RCBC) chief economist Michael Ricafort.

The immediate major support for the PSEi now, he said, is 6,950 to 7,020 level, which helps keep the underlying upward trend over the past four weeks intact for now.

There has been no Christmas rally so far, as the markets are also anticipating further progress on the CREATE Bill which could become the country’s biggest stimulus measure, especially after the final approval of the 2021 national budget by President Duterte as scheduled on Dec. 28.

Nevertheless, since the start of December, the PSEi already gained 6.1 percent, Ricafort said.

Last week, the PSEi ended slightly up, after easing for four straight days, by 1.99 points or 0.03 percent to close at 7,204.38 on Dec. 23.   The PSEi reached a high of 7,251.02 on December 21 and a low of 7,075.18 on Dec. 23.

“Locally, the markets anticipate President Duterte’s final approval of the 2021 national budget scheduled on Dec. 28, as well as the possible final approval of the extension of the 2020 national budget funds availability up to end-2021, six-month extension of the Bayanihan 2 Law until June 30, 2021, and also on the FIST Bill,” Ricafort said.

Commenting on the equities market in general, the Market Call, a publication by First Metro Investment Corp. & UA&P Capital Markets Research, said earnings recovery in the third quarter kept the PSEi above 7,000 up to mid-December as business and consumer confidence were restored.

“This brought back local investors to the equities market despite the ambivalence of foreign investors. Nonetheless, the more definitive economic recovery that we expect in 2021, still requires some selectivity since we will likely see some more volatility in the first half,” it said.