• Equities seen searching for local leads


    After weeks of having been relatively sensitive toward the movement of global markets, the local stock market could start searching for local leads as it anticipates a major economic indicator showing positive gains within the next few days.

    Jonathan Ravelas, BDO Uni–bank Inc. chief market strategist, said in a text message that “positive news out of US, particularly economic indicators, will highlight trades moving forward”.

    But one economic indicator that Ravelas could be referring to is the announcement of the country’s gross domestic product (GDP) growth in the second quarter or in the first half of the year.

    With the upbeat business and consumer sentiment, the Philippine economy posted a 7.8 percent GDP growth in the first quarter of 2013 from 6.5 percent the year-on-year.

    For the first half of the year, Eduardo Francisco, president of BDO Capital and Investment Corp. told The Manila Times that the GDP growth may more likely be the same, or like the first quarter figure.

    The National Economic and Development Authority (NEDA), on the other hand, said the Philippine economy may likely remain robust in the second quarter of the year

    However, the Philippine Exporters Confederation forecasted the GDP to grow at a slower pace in the second quarter on lack of stimulus.

    “We have maintained that the good numbers, recently affirmed by improved forecasts by Nomura and the IIF putting GDP at above 7 percent for the full year, should translate to a good performance in share prices,” Jun Calaycay, Accord Capital Equitites Corp. analyst, said over the weekend.

    “The numbers have proven themselves. It is now up to the market to choose which set of news should exert primary influence on their decisions. Admittedly, the Fed factor looms large and thus, the dictates of foreign fund flow in reaction to this impact heavily on local’s decision making,” he further said.

    For this week, risk lies toward a test of 6,150 points to 6,350 points, Ravelas added.

    Philippine Stock Exchange President and Chief Executive Officer Hans Sicat said late Friday that once investors’ go back from vacation, the market may see more activities. The market is currently in the ghost month where most investors take a break for vacation.

    In the previous week, the fall of many regional markets dragged down the local stocks to a bearish trade on Friday.

    The Philippine Stock Exchange index (PSEi) ended Friday trade with a 0.83-percent decline, or 54.76 points to 6,525.95,while the wider all-shares,barometer went down by 0.60 percent or 24.14 points to 3,974.93.

    An analyst cited that the market was down over fears that the US Federal Reserve will start reducing its bond buyback program.

    Except for mining and oil, majority of the sub-indices plummeted toward the last trading session for the week.

    On Thursday, profit-taking among investors caused the market to snap out of its growth momentum, sending the PSEi to its first correction for the week.

    Before that correction, local shares have been moving forward, registering a three-day upward momentum within the five-day trading week.


    Please follow our commenting guidelines.

    Comments are closed.