Last week, the Philippine composite index or PSEi gained 55.81 percent, or 1.67 percent, to 3,389.37, the highest close since Feb. 5, 1997 when it settled at 3,396.04 points. The all-time high level was recorded at 3,447.60 posted on Feb. 3, 2007.
"The market needs to build a stronger base before retesting the 3,400 resistance level," said Rommel Macapagal of Westlink Global Equities.
"Like we have been saying almost every week now, we should be seeing a market correction or at least a breather coming soon. So far, we have not seen that correction that we are anticipating," said AB Capital Securities Inc.
AB Capital Securities said while the market hasn’t had a major healthy technical correction, there seems to be no strong selling pressure due to the lack of alternative investments outside of equities.
"It is turning out to be difficult for traders who are waiting on the sides to buy on dips. At the rate investors keep pouring in, we are almost certain to test the all time high levels as early as the first quarter this year," AB Capital Securities said.
Analysts said the market correction could be brief due to the government’s healthier fiscal condition that support a rosier outlook for the country’s economy, and the prevailing low interest rate environment.
Leading the market last week were Philippine Long Distance Telephone Co. (PLDT) which is now back above P2,600 on the assumption of higher 2006 earnings, Filinvest Land which rose to P1.88 on the back of new projects, and SM Prime Holdings Inc. which also reported higher earnings for 2006.
Balabac Resources took the centerstage last week after it disclosed a plan to move into real estate development via Eton Properties Philippines. It hit a high of P4.95 before closing at P4.40 Friday or an increase of 165 percent from P1.66 the previous week.
Stockportal 2tradeasia.com said the market is beginning to price-in similar positive reviews from Standard & Poor’s, following California Public Employees Retirement System’s move to upgrade the Philippines’ rating within the former’s list of permissible investment destinations for 2007.
"With reform plans on track to government’s aim to balance the budget, attention could focus on deployment of expenditure plans, especially those tied to infrastructure support, mining/mineral exploration, trade/services as well as export-based industries," 2tradeasia.com said.