AB Capital Securities research head Jovis Vistan said that "since the market has moved up in the last six sessions without a break, there is room for a technical correction before the onset of the next phase of the uptrend."
Investment stock portal 2tradeasia.com said investor positioning on the Philippines’ prospects in the second quarter are bound to seize on dips to position in stocks with good fundamentals.
Last week, the Phisix closed two percent higher at 2,150 with banks continuing to lead the market on news that the Senate and Congress approved the extension of the Special Purpose Asset Vehicle (SPV) act which is aimed at improving capital adequacy ratios.
"The market needs strong positive news to push the main index past the strong resistance level. The surprising strength in the market last week was influenced by the gains in the major markets abroad. And with the lack of domestic leads, the key driver to break the resistance will be sentiments in equities and interest rates globally. The improvement in the government’s fiscal deficit situation could help improve sentiments of the markets further," Vistan said.
"The major resistance is at the 2,160 level, which also acts as the neckline of a bullish inverted head and shoulder formation. A close above the neckline could propel the index to 2,240, a potential new six year high," Vistan added.
2tradeasia.com said the market, having established its position above 2,150, may test 2,180-2,200 this week, with immediate support at 2,130.
2tradeasia.com said the re-emergence of mergers and acquisition stories are bound to fuel interest towards financials and property shares, as the benefits of market leadership and consolidation take hold.
BPI was among the gainers last week, closing five percent higher at P62 each share. The country’s biggest bank in terms of market capitalization rose on news it adjusted its 2005 net profit to P8.4 billion from the earlier reported P8.1 billion, after making accounting related adjustments. This brought year on year growth to a higher 25.4 percent, over 2004’s income of P6.7 billion.
Reports that an unnamed buyer has offered to acquire shares held by majority shareholders of Equitable PCI Bank fueled a rise in the bank’s share price by 20 percent to a high of P78 each share.
First Metro Investment Corp.’s Junie Banaag said Filinvest Development Corp., the holding company of the Gotianun family, is worth watching out for given the continued improvement in its recurring income.
After its price fall from P14 each share in 1996, FDC settled at P1.20 beginning 2001 onwards. Its price has already doubled since the beginning of the year on volumes of P2.5 million per day, Banaag said.
Banaag noted that vertical development in Filinvest Corporate City has expanded FDC’s recurring income and provided strong cashflow. "A number of developments are in fact underway – something that institutional funds will have to see for themselves to appreciate – that will boost earnings this year," Banaag further said.
"If you were to deduct the value of FDC’s biggest assets – Filinvest Land, Inc. and East West Bank – from its total market value or market cap, you will be left with P6.4 billion. If you were to apply this across the 89.1 hectares of available commercial land that FCC is selling, the equivalent price per square meter is only P720," Banaag said.