The main index went up by 41.97 points or 3.75 percent week on week, ending at 1,161.69 on Friday as bargain hunters stepped up their activities, setting aside the spate of negative developments in the meantime to pick on oversold, mostly blue chip, stocks.
"The Phisix was about to make its 10th consecutive week of decline until traders came to the market’s rescue with prices dropping to the point where players were able to shrug off the market’s woes," investment portal PhilStocks.net said in its weekly report.
It pointed out that before the rebound, the market has mostly been on a downward spiral as investors worried over the government’s bloating fiscal deficit, weak corporate earnings, political bickerings, and, on a wider scale, the renewed fears of terrorist attacks and the multi-billion dollar accounting scandals in the US.
"These worries have effectively dampened investors’ sentiment, quashing any potential incentive to buy stocks. What the market needs is a combination of improving macroeconomic fundamentals, positive earnings reports and an extended period of free of fresh bad news," Philstocks said.
It added that while the market is likely to move sideways with an upward bias, its oversold state offer no guarantee of sustainable gains. "Volume has been thin and that means there is still a major lack of confidence on stocks. Sustainability remains suspect as caution and uncertainty points to further consolidation," the Philstocks report said.
For its part, 2TradeAsia.com, the website arm of F. Yap Securities, said the continuing development in the PLDT-Bonifacio Land deal would remain a major factor in investors’ mind as local players search for firmer clues if there would be any possible win-win solution to this issue within the week, which might support the Phisix’s potential rise above 1,200.
"Provided there won’t be any negative news flow overseas, and the conduct of the local barangay elections will turn out to be peaceful, market indices might move higher, as buyers re-test the Phisix’s ability to move past 1,200. Meanwhile, caution should still be exercised within a four-day trading week, as general macroeconomic risks (i.e., US’ next move on the Middle East, creative accounting woes and other terrorism threats) are still present," it added.