Market may sustain rally

MANILA, Philippines — The local stock market may  sustain last week’s rally if there will be more positive catalysts in the coming days, according to analysts.

“Immediate support is seen at 6,500 and resistance at 6,700,” said online market portal 2TradeAsia.

The brokerage firm said the Philippine Stock Exchange index could eventually hit above its latest high of 7,300.

Last week, bulls reigned in the market as investors took the cue from global debt watcher Standard & Poor’s which gave the country a BBB+ credit rating. Investors are also banking on more relaxed quarantine measures.

The PSEi surged by 7.67 percent or a whopping 474 points to close at 6,674 last week  as sector indexes advanced.

Average value turnover  jumped by 119.2 percent to P11.6 billion.

2TradeAsia said market investors are keeping a close watch on the COVID-19 vaccine rollout, noting that a faster pace may result in herd immunity sooner.

“The health bureau targets herd immunity or 70 million out of 110 million Filipinos being vaccinated by the end of the year. A check of the math puts the target daily vaccination rate at 550,000 to 600,000 – far and away from the 165,000 rolling average for the last week of May.

Lofty ambitions aside and focusing on actual efficiency improvements, recall that in the first week of May, the country’s vaccination rate was at 60,000 to 80,000. At the current rate of 160,000 to 180,000, herd immunity can be achieved by the third quarter of 2023,” it said.

This pace can improve further as public absorption improves, as well as supply and logistics issues.

When this happens, a bull-case herd immunity is achievable some time in 2022, it said.

2TradeAsia said  any easing in quarantine restrictions  could support the recent rally.

On the other hand, further restrictions could again turn investors away from the market.

Specific factors that could affect the market this week include Monde Nissin’s initial public offering, the inflation report for June and the corresponding response from the Bangko Sentral ng Pilipinas.