Higher on bargain-hunting, capped by caution


    PHILIPPINE stocks are likely to trade higher this week, with some bargain-hunters seen returning to the market after several weeks of declines due to weak global market sentiment.

    In a weekly market outlook, BPI Asset Management said that the Philippine Stock Exchange index (PSEi) may trade favorably this week on potential bargain-hunting after a series of declines in the past few weeks.

    “We expect the local equities market to trade within the range of 6,946 to 7,145 with an upward bias, as investors begin to bargain hunt following multiple weekly declines,” BPI Asset Management said.

    However, it also said investors will remain cautious due to volatile currencies globally.

    “Continued volatility in regional currencies may temper any significant recoveries in share prices. Moreover, investors will remain watchful of US economic data (inflation, housing data, jobless claims, among others) that will come out for the week as these would impact the flows in the market,” it added.

    For his part, Justino Calaycay Jr. of Accord Capital Equities Corp. said that while investors will likely remain cautious, the benchmark index is still inclined to a positive trend towards yearend on the upcoming release of third quarter corporate earnings results.

    “Taken together, the obvious suggested stance leans toward cautionary trading, with an eye to acquiring top-line counters ahead of the earnings season,” Calaycay said.

    “The pessimistic tone the market had been singing may spill over to the incoming week, although the Dow Jones Industrial Average index’s 263 points rebound Friday may invite positive bets to effectively counter the bears — at least those waiting for the 10 percent correction work,” he added.

    Calaycay cited the two-day rebound of the PSEi last Wednesday and Thursday, noting that the market still went up even if the global markets were down. He said this was an indication that the bulls are starting to kick the local stock index up.

    “In fact, for most of last week’s sessions, the market started to display its resiliency again. It showed it can trade in the green even amid wild negative swings in the region — and worldwide. It even managed to close in positive territory Wednesday and Thursday — a clear indication that the bulls are fighting back,” he said.

    Despite gaining in earlier trades, the PSEi finished the week with a 0.36-percent decline, down 25.36 points at 7,003.22 on Friday, albeit remaining in 7,000-point territory. The wider All Shares index was down 12.81 points or 0.31 percent at 4,150.28.


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