Stocks seen range-bound this week

MANILA, Philippines - Taking positive cues from the US markets, the local bourse may open with gains today but will remain range-bound during the week as investors keep a watchful eye on the eurozone.

Traders said they might look to do some window-dressing going into the end of the year, although trading activity would likely be somewhat subdued.

“The Christmas week may begin to see the beginnings of window-dressing, expected to intensify in the final week,” said Jun Calaycay of Accord Capital Equities Inc.

The Philippine Stock Exchange index (PSEi) inched up by 0.29 percent on Friday to close at 4,304.94, buoyed by positive US economic data.

Calaycay said while there is enough optimism to push equity prices higher, the European sovereign debt crisis continues to worry investors.

“The US has given some reason to hope as economic numbers begin to show intermittent positive signals, albeit many are wont to warn that the clearing is still covered with haze. The biggest doubt is being laid on the table by Europe’s debt problems as it has been for most of the year. And it may well be playing the same role moving into 2012,” Calaycay said.

Calaycay has advised investors to shift focus to counters backed by relatively strong fundamentals and stay away from speculative issues.

AB Capital Securities Inc.’s Maria Arlysa Narciso said while the country is slightly insulated from a direct impact of the European debt crisis, the ripple effects are starting to be felt in Asia.

China, which exports its products to Europe, is seeing signs of a growth slowdown as manufacturing and exports weaken. The world’s second biggest economy’s trade surplus shrank in November while the 13.8 percent rise in overseas shipment for the same month was the weakest since December 2009.

“China is one of our major trading partners. If their economy weakens, we might experience lower export demand from them,” Narciso said.

“Investors are concerned about how 2012 will be for the global economy and how it may impact ours. Although a slowdown is imminent, we do not see such condition to last the entire 2012 for we have already had our share of weakness this year,” she added.