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Business

Stocks seen testing 3-month high

Iris Gonzales - The Philippine Star
Stocks seen testing 3-month high
The benchmark Philippine Stock Exchange index (PSEi) gained for the fourth straight week to close at 6,699.66, up by 294.16 points or 4.6 percent week on week.
STAR / File

MANILA, Philippines — Share prices are seen testing three-month highs this week, which can serve as the next breakout point versus further upside potential into the 7,000 levels.

Last week, the benchmark Philippine Stock Exchange index (PSEi) gained for the fourth straight week to close at 6,699.66, up by 294.16 points or 4.6 percent week on week.

The PSEi’s next target is now seen ranging from 6,800 to 6,900 levels, said Michael Ricafort, chief economist at Rizal Commercial Banking Corp.

He said immediate support lies at 6,400 to 6,500, especially the gap area of 6,472 to 6,505 that was abruptly skipped on Aug. 11.

He said Fitch Solutions’ upgrade of its estimate for Philippine GDP growth for 2022 to 6.6 percent from the previous estimate of 6.1 percent, the continued better corporate earnings results that fundamentally help further improve valuations, and the recent partnership deal between ABS-CBN and TV5 have helped boost local stock market confidence.

Other positive catalysts to the recent gains in the PSEi include the generally better Philippine economic data for the second quarter, which is still decent at 7.4 percent year-on-year, despite slower compared to market expectations, and the debt-to-GDP ratio, which improved to 62.1 percent as of the second quarter after the 17-year high of 63.5 percent in the first quarter amid higher economic growth.

“The local stock market sentiment is also supported by the fact that US stock markets have posted new highs in at least three to 3.5 months lately amid three-month highs in US consumer sentiment gauge and slower-than-expected producer inflation,” Ricafort said.

This developed as the Philippine Stock Exchange (PSE), the operator of the local bourse, announced over the weekend that it will hold another Investor Day, from Aug. 16 to 18, which will gather corporate and finance leaders of 15 publicly listed companies (PLCs).

“This event highlights the importance of investor relations and the need to communicate with the investing community. Participating in the PSE STAR: Investor Day program affords the non-index PLCs a good opportunity to tell their story to the investing public,” said PSE president and CEO Ramon Monzon.

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