"With the long awaited catalysts now at hand, we believe the worst is over for the market," Wise Securities research head Jose Vistan wrote in a report posted at the philstocks.net website.
The main stock index closed at 1452.93 last Friday, a slight one percent rise from the previous day but over five percent down from a week earlier due to last Wednesday’s sharp six percent decline.
The drop was in reaction to the controversial Senate vote that effectively shut out the prosecution’s case in President Estrada’s impeachment trial but led to a string of surprising developments: The resignation of key figures in the trial led by Senate President Pimentel and the entire 11-man House prosecution panel, the convergence of throngs of people at the historic EDSA Shrine in protest, and the series of defections and resignations by top Cabinet, military and police officials.
"What we will be seeing is a more positive attitude towards the markets. The peso has appreciated while stocks are going to play catch up," Vistan said.
Last Friday, the peso surged by a record P7.29 or 13.3 percent to close at 47.50 to a dollar, from 54.79 the previous day in a kneejerk reaction to the military and police defections. Currency trading lasts the entire workday while stock trading goes on only until noon.
"A change in government will be the main fundamental buying force in the market," Vistan said. Last Saturday, Vice President-elect Gloria Macapagal-Arroyo took her oath as the country’s 14th President as soon as Estrada and his family moved out of Malacanang and the Supreme Court declared the position of the Chief Executive vacant.
But amid the euphoria over the successful people power revolt and the installation of a new administration, Vistan warned the near-term outlook in the GMA presidency remains uncertain, which could make any rally short-lived.
"What lies ahead after Erap is still a big question mark? These uncertainties will linger for the time being until two questions are answered: Will the new leadership under Macapagal-Arroyo revive investors’ confidence? Can we avert a recession with the latest development in the political arena?" Vistan noted.