MANILA, Philippines - Local stocks are expected to lurch into positive territory this week as worries over the euro zone’s sovereign debt crisis and the weakening US economy have abated.
Last week, the benchmark Philippine Stock Exchange index (PSEi) closed at 4,290.17, down 56 points week-on-week due to concerns over a sharp drop in major markets.
US stocks, however, have been on the rise after the European Central Bank announced plans to make it easier for euro zone institutions to borrow dollars, a move seen by many as a sign that Europe’s political and economic leaders were committed to contain the crisis.
The general movement remains largely sideways but the bias is expected to shift to positive, said Accord Capital Equities Inc.’s Jun Calaycay.
Calaycay, however, said the market may head lower, which should open doors for accumulation.
Leading online brokerage firm Citiseconline said that with most markets globally oversold, there is a strong possibility of a rebound that could result to a yearend rally.
Citiseconline said investors should put in more money in Asia and the Philippines where interest rates have fallen sharply and are likely to go lower.
The online brokerage house noted local investors account for up to 70 percent of total trades in the PSE. “While we admit that global funds flow will still have an impact on our market, Filipino investors faced with lesser opportunities to earn off their savings rates fall – will continue to deepen the local market and make it more stable viz other countries,” Citiseconline said.
“This could provide a strong base for the PSE, even if foreign funds decide to bypass the Philippines today, if only for the reason that our market has not fallen as hard as the others, and therefore not too many bargains can theoretically be found,” Citiseconline further said.