Stock-Market Outlook

Last week

SHARE prices fell again last week, with the main index returning to the 6,400-point level as the Silicon Valley Bank dilemma continued to weigh in on the market.

The Philippine Stock Exchange index fell 120.16 points to close at 6,469.72 points.

It was all red for three of the five trading days with the biggest fall occurring on March 14 when the main index lost 2.3 percent. The index regained half of what it lost on the next day but fell again on Thursday.

The volume of trade for the week was erratic but average value reached P5.91 billion with foreign investors, who took in half of the trades, were net sellers at P27.33 billion.

Most of the sub-indices closed on the red led by the broader All Shares index, which fell 76.12 points to close at 3,462.27 points. The Financials index declined 41.18 to 1,794.34. The Industrial index lost 228.64 to 9,353.95. The Holding Firms index rose 38.36 to 6,310.70. The Property index shed 88.38 to 2,708.17. The Services index plunged 76.45 to close at 1,567.38. And the Mining and Oil index retreated 185.39 to 10,511.31.

For the week, losers edged gainers 169 to 58 and 24 shares were unchanged.

The top gainers were: Ionics Inc.; Manila Bulletin Publishing Corp.; Xurpas Inc.; Anchor Land Holdings Inc.; Philex Mining Corp.; Keppel Philippines Properties Inc.; and, SP New Energy Corp.

Top losers, meanwhile, were Jolliville Holdings Corp.; Lorenzo Shipping Corp.; Manulife Financial Corp.; MRC Allied Inc.; Easycall Communications Philippines Inc.; Now Corp.; and, Nickel Asia Corp.

This week

SHARE prices may remain down this week as trading is expected to be challenging.

Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financials Inc., said the market is expected to take cues from the monetary policy meetings of the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP).

“While a 25-basis point increase is already projected for each [US Fed and BSP], investors are seen to be more interested in hints with respect to their policy direction,” Tantiangco said. “Cues that would point to a still long monetary tightening path ahead may weigh on the local market, while hints of the monetary tightening ending soon may boost sentiment.”

The local market’s support is seen at 6,400. Its resistance is seen at 6,600.

Meanwhile, broker 2TradeAsia said it would be interesting how authorities will intervene as the market is panicking with the recent fall of the Silicon Valley Bank. The European Central Bank has defied expectations and continued to hike its rates as inflation remained elevated.

“Expect banks and bank-adjacent sectors to come under the microscope, as investor attention shifts to credit and liquidity. Some consolidation and stricter regulations in the sector may cause chaotic price gyrations, but hegemony in this space should come out relatively unscathed,” the broker said.

It said while the market is quite far from sterling, peaking in 2017, it is neither resembling its financial crisis of 2008, at least so far.

Stock picks

MAYBANK Investment Banking Group has placed a “buy” rating on the stock of Universal Robina Corp., the Gokongwei’s food unit.

“Our revised target price implies full year 2023 income PER (price to earnings ratio) of 25.3 times, which is still below its 5-year PER of 27.3 times, reinforcing our buy call,” Maybank said, placing a price target on the stock at P160 per share.

“URC is our top pick in the consumer space given its sustainable earnings trajectory, which is underpinned by its market leadership in key categories, prudent inventory hedging, strong management team and execution abilities,” it said.

URC’s share price was last traded on Friday and closed at P142 apiece.

Meanwhile, Maybank also retained its “buy” rating on the stock of Metro Pacific Investment Corp. (MPIC).

“We raise our target price for MPI to P6.30 from P6.20 to reflect our earnings revisions. It’s trading at a 60 percent discount, above its 10-year average of 52 percent,” Maybank said.

“We expect the stock to re-rate as the regulatory overhang on Maynilad and MPTC (Metro Pacific Tollways Corp.) has been resolved and there is progress on the resolution of Manila Electric Co. fifth 5th regulatory period,” it said.  The shares of MPIC closed last week at P3.70 apiece.