PSE seen testing new territories this week

MANILA, Philippines - After conquering the 7,500 level last week, the Philippine benchmark index is expected to trek uncharted territories in the next five trading sessions as momentum fueled by the country’s promising growth story may continue, analysts said.

Not disregarding volatility along the way, analysts said the local stock market is seen drifting sideways but on an upward bias this week.

“Sessions will continue to stay volatile, although the overriding theme might stem on the Philippines’ promising growth outlook this year,” said Jason T. Escartin, investment analyst at F. Yap Securities.

Escartin placed immediate support at 7,450 to 7,500, with resistance at the 7,600 to 7,700 levels.

He said the limelight locally would still be on large-cap stocks as players reassess regional risk weighting. 

“Extra influx of fresh cash is seen for Philippine equities, as some institutional investors realign assets from other markets,” Escartin said.

Abroad, Escartin said results from Greece’s snap elections on Jan. 25 plus the start of the US Fed’s Open Market Committee meeting on Jan. 27 are just some of the things to watch out for that may affect the local market’s mood.

Upbeat economic data overseas along with an improved outlook on the Philippines propelled the market last week.

The Philippine Stock Exchange index (PSEi) closed out the week 58 points or 0.77 percent higher week-on-week at 7,548.93, its third record-setting performance in just the first month of the year.

PSE chief operating officer Roel A. Refran believes that the Philippine stock market would remain resilient amidst the global factors due to investors’ continued confidence in the economy.

“With the moderate slowdown in China’s economy, coupled with Japan’s economic recession and Europe’s debt crisis, and notwithstanding the US economic resurgence, emerging markets such as the Philippines will stand out due to its strong macro-economic fundamentals and sustainable growth story,” Refran said.