MANILA, Philippines - The local stock market may take a breather and pull back a bit this week after snapping a record-setting spree, analysts said.
Last week, the Philippine Stock Exchange index surged 51.94 points or 0.66 percent to close at its best finish ever at 7,825.39, buoyed by strong investor optimism.
Accord Capital Equities Inc.’s Jun Calaycay said local stocks may undergo a long-awaited correction with trading volumes thinning in the past week.
“The validity of this close at a new record needs to be tested and validated in the coming days. Of utmost consideration for us is the fact that participation has relatively thinned as the market advanced further,” Calaycay said.
Anton G. Alfonso of RCBC Securities said while the main benchmark index continued to soar to new all-time highs , “investors lacked conviction, probably distracted by the the Chinese New Year, not to mention waiting for further full-year 2014 earnings results from companies.”
Some analysts, however, think there is still room for the bull run to continue after the euro zone finance ministers reached an agreement to extend Greece’s financial rescue by four moths, a move that would keep the debt-laden country from exiting the single currency euro bloc.
The breakthrough in the standoff between Greece and its creditors came just a week before Greece’s 240 billion euro bailout program expires.
The agreement is aimed at buying time for both sides to agree on a longer-term deal to ease the burden of Greece’s bailout loans.