Security Bank Seen to Extend Rebound After its Exclusion from the PSEi
Security Bank Corporation (SECB) had languished to as low as Php80.00 in August from a high of Php105.00 a few months back as investors had anticipated that it would be removed from the Philippine Stock Exchange Index or the PSEi as its total market capitalization fell below the top 30 biggest among the listed companies. Indeed, the PSE announced that Semirara Mining and Power Corporation (SCC) would replace SECB in the PSEi, effective on the close of August 5. Since then, however, trading on the stock has normalized and the stock has rallied sans the selling pressure from passive index funds that originally held the stock. Moving forward, the stock is actually seen to extend its rebound as it is now poised to swing from an interim bullish reversal. Note that the stock would enter a fresh short run up leg should it finally clear its near term resistance at Php93.00. In such event, the stock would position itself to reach its next notable resistance at its previous support at Php104.00. On the fundamental end, consensus (Bloomberg) actually gives SECB a 12-month fair value estimate of Php128.97.
The last time that Security Bank was removed from the index was back in May 2020. As you can see, the stock also slipped to a low of Php77.00 following the announcement of its removal. Since then, however, the stock has managed to rally and bring itself back above Php100.00 over the next few weeks.
SECB write-up from the Trading Edge Equity Advisor:
November 23, 2020
Security Bank Corporation (SECB) is now given a technical buy rating. As you can see from its chart, the stock has just pivoted off a bullish reversal in the form of a rounding bottom pattern. Given its break past Php113.00 on better-than-average volume, the stock may then reach for its next resistance at its prior support at Php133.20 to Php140.00.
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*Consensus target price or average target price given by the major foreign and local brokers of various stocks on top of index names are available in our Equity Advisor!
