RP investors wait for SONA, 2Q earnings

Investors have adopted a wait-and-see attitude until President Benigno Aquino III delivers his State of the Nation Address Monday and companies report on second-quarter earnings. "Although most economic forecasts for the country are positive, President Aquino's words will have a significant weight on the direction we're heading [for] and the overall sentiment of the people," AB Capital Securities Inc. said in its weekly report. Another important thing to look into is the second-quarter earnings of companies, with Manila Electric Co. expected to come up with the first report, according to AB Capital. AB Capital noted that results will signal "whether the views of a better economy reflected on company performance. Also, if revenues turned out better then we can safely say that we can smoothly achieve a strong growth this year." The coming week, it said, will bring many new things for the market as the new trading system (NTS) will be implemented Monday. With the NTS, AB Capital said the volatility of the market will be lessened. The NTS application is designed to trade a wide range of cash, debt, and derivative instruments. The new system is also expected to improve the capacity of the Philippine Stock Exchange to handle future sharp increases in its value turnover. Still, AB Capital pointed out: "Next week could be another trek downward for the market if expectations are not met. For its technical indicators, we are on track for a correction next week. This is needed since the index had already gone a long way strongly and valuations have turned higher." Last week, the Philippine Stock Exchange index (PSEi) reflected how uncertain the market’s emotions were as it waits for market-moving developments. The PSEi closed at 3,416.10 points Friday. Analysts said the week's close – from 3,442.68 a week earlier – implied a retest of the 3,450 resistance level. —VS, GMANews.TV