Philippine Stock market outlook july 23-27 2012

Philippine Stock market outlook july 23-27 2012 : The benchmark Philippine Stock Exchange Index (PSEI) posted small losses as investors focused on weak economic data in the US. The PSEI lost 0.07 percent week-on-week to 5,210.89 points.

Investors remained anxious over the faltering US economic recovery and the company earnings for the second quarter. The world’s largest economy is under the spotlight as the tepid recovery sparks the speculated additional monetary stimulus,

Subindices also closed the week mixed with the financial subcounter leading gainers with a 1.16-percent increase week-on-week while declines were led by mining and oil, which dropped 3.74 percent.

US stocks took a beating on Friday following mixed earnings from US companies and ongoing concerns in Europe. The Dow Jones Industrial Average fell 0.93 percent to 12,822.57 while the Nasdaq and S&P 500 dropped 1.37 percent and 1.01 percent, respectively.

This week: Analysts expect the index to trade within a tight range as investors await developments coming from the regular policy meeting of the Bangko Sentral ng Pilipinas (BSP) later this week and the State of the Nation Address (SONA) on Monday.

We don’t expect the BSP to adopt more easing measures as they are not necessary given our economic performance,” Gregg Adrian Ilag, equities analyst with AB Capital, said in a report. “As for the SONA, we expect the president to deliver concrete economic agenda’s favoring the business environment.”

Anticipation for second quarter earnings will also help shape the market’s direction.

“The index’s current levels are not attractive to chase in terms of risk and return. However, corporate earnings in the second quarter will be able to ease valuations as well as encourage sentiment,” Ilag said. AB Capital anticipates the index to trade between 5,200 and 5,300 this week, based on technical indicators.

“We remain optimistic on equities over the long term. However, the current valuations are not attractive as majority of stocks appear fairly valued. We expect the index to trade again in a range next week with bias to the upside,” he said.

• Stocks to watch: AB Capital said investors need to be more selective in their choices given current conditions. It currently has “buy” ratings on First Philippine Holdings Corp., its power unit First Gen Corp., and BDO Unibank Inc.

For the latest updates on the stock market, PRESS CTR + D or visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today

Related Post: