Weekly Equities Summary and Outlook : January 22-26, 2018

First Metro Weekly Equities and Economic Outlook - January 22 - 26, 2018

Market Outlook. We see 9,000 as the emerging support for PSEi if 4Q17 earnings don’t disappoint. So far, UBP has released its FY 2017 income up 30.4% y-o-y to P8.2bn, in line with consensus.

Drivers. Strong 4Q17 earnings results to validate the strong market run-up.

Market review. The PSEi closed yesterday at 9,058.62 (+0.2%), supported by the alltime high index levels in the US following strong 4Q17 earnings results. On Friday, PSEi finally broke the 9,000 level to close at 9,041.20, up 1.7% wow and 5.6% ytd. Investors focused on sustained PH growth at 6.6% in 4Q17, as the underlying strength of the economy remained intact - i.e. strong domestic demand (+7.3% vs +6.4% in +3Q17).

• Market has been up 12% since its last correction on Dec. 4 to 8,083, where PSEi dropped by 5.1% from Nov. 6’s level of 8,523.
• Net foreign buying was sustained for 6th straight week at P543mn and P6.9bn ytd.
• PSEi was 4th highest gainer in Asia, up 5.6% ytd. Top gainers were Hong Kong (+10.8%), China (+7.6%) and India (+5.9%).
• Most foreign bought stocks were ALI, TEL, JFC, MBT and URC amounting of P1.4bn. Most sold stocks were AC, BDO, LTG, BPI and GTCAP totalling P1.5bn.