Market showing no sign of retreat

MANILA, Philippines - The local stock market is showing no sign of retreat as global equity markets around the world, continue to advance, sparked by positive US data and corporate results.

A growing optimism that companies are seeing signs of a recovery after a crippling global recession, coupled with local developments in specific stocks like Manila Electric Co. (Meralco) and Metro Pacific, helped the main composite index rise 122.51 points or 4.8 percent week on week to close at 2,676.47.

Average daily turnover rose to 2.53 billion shares worth P3.58 billion ($74.4 million) this week from 2.22 billion shares worth P3.065 billion the previous week.

Anthony Prince Yeung of AB Capital Securities Inc. said acquisitions will present unique opportunities to make a quick profit in the stock market.

“Acquisitions and rumored acquisitions have helped give the market a little something extra. Whenever there are reports, whether confirmed or speculative, the company that is supposedly being bought has experienced significant gains,” said Yeung.

April Lee-Tan, research head at CitisecOnline, however, believes that a correction should take place in the near term since the PSEi’s valuation is no longer attractive, having risen by 48 percent in just a period of three months.

 “At its current level of 2,600, the PSEi is trading at 15.7X trailing P/E, only slightly below its historical average of 16.1X,” Tan said.

Online stockbrokerage house 2tradeasia.com said the PSEi will move sideways at 2,600-2,690.