Trading is expected to be volatile this week as investors cautiously await the market’s reception to the debut of GMA Network Inc. as well as subsequent follow-on offers from other listed firms.
GMA which is scheduled to list at the Philippine Stock Exchange today, is hounded by controversy stemming from a letter complaint filed by former Congresswoman Imee Marcos, claiming that the shares of the Duavit family in the network are owned by the late President Ferdinand Marcos, which he bought from Republic Broadcasting through Gilberto M. Duavit in 1973. The shares amount to 28.35 percent of the share capital of GMA.
Analysts said the index could trade between 3,500 and 3,600 as investors stay on the sidelines given the recent selloff in global stock markets spooked by weak US housing market data and higher prices of crude oil.
Investment stock portal 2tradeasia.com said investors are also expected to track the peso-dollar market movements and bond prices to check if there might be a short-term shift in portfolio allocation in favor of alternative markets.
2tradeasia.com said investors might also monitor sequels to a solon’s testimony before the Anti-Graft Court, covering tobacco and beer magnate Lucio Tan’s firms, specifically if this would create any direct/indirect bearing on some of his listed companies.
Immediate support is seen at 3,450 to 3,500 while resistance is at 3,600 to 3,650.
Last Friday, the main composite index plunged by 140.92 points or 3.8 percent to 3,518.76, its lowest finish since June 7, when it settled at 3,528.79. The index posted a drop of 5.8 percent from the previous week.
Wall Street’s selling rampage hit regional bourses in Asia as fund managers were alarmed whether specific measures were being undertaken by authorities to resolve mortgage default concerns with the prevailing housing slump in the US.
“The string of argument stemmed from uncertainties whether a certain sector’s weakness would be enough to over-turn gains in other segments within the US economy. While seasoned equities investors learned their lesson well following the selling stigma during the financial and property bubble, contrarians typically seize these opportunities to reposition cash in fundamentally-supported markets like Asia, on account of detailed measures that have already been instituted within its financial and property industries,” 2tradeasia.com said.
“Given the influx of foreign funds that moved into Asia’s waters, it is natural to see ‘temporary aberrations’ or knee-jerk reactions when markets are weighed by panic selling before investors could finally come to their senses. For risk-averse players however, it might be fitting to recall the adage of ‘pocketing modest gains’, than missing out windows to position in stocks that are quick to recover as soon as the smoke settles,” 2tradeasia.com said.