After the two-day rebound, the market seems to have enough gas to make another one and sustain its uptrend on the back of positive listed firms’ fundamentals.
Jun Calaycay, analyst at Accord Capital Equities Corp., said that the rebound should continue into the week with investors refocusing on company fundamentals, particularly hunting for bargains that have opened up.
“As we move farther away from the period that just ended, more objectivity can creep back into the decision-making process,” he said.
“Markets appear to have awakened from the doldrums of the last couple of weeks. The scare created by speculations on the Fed’s action on stimulus has begun to fade back into the woodwork,” he added, referring to the US Federal Reserve.
Calaycay further said that the country’s economic numbers still served to validate the optimism mirrored by the market’s record-setting run.
According to him, the market may have lost its footing weeks ago, but the Philippine economy continues on its growth trajectory.
In the previous week, the Philippine Stock Exchange index (PSEi) registered its worst weekly drop since it lost 5.4 percent in the week ending May 18, 2012.
Calaycay explained that in this bull era, the worst single week fall measured -9.4 percent in the week ending September 23, 2011.
“Spooked by a sudden reversal in global equity markets on speculations the US Federal Reserve was poised to scale back stimulus, investors dumped shares like a hot potato sending the PSEI -6.6 percent lower at midweek,” he said.
“It has been downhill for the local market since a failed attempt to better the 7,392.20 [points]all-time closing high. In the 12 sessions after capping that attempt at 7,385.07, the measure closed lower seven times by an average -2.07 percent,” he added.
The local market, however, posted a recovery in the last two sessions of the previous week, after investors started to look for assets they could buy.
On Friday, PSEi made a comeback to the 6,700-point level as bargain hunting persisted. The bargain hunting started on Thursday where the market managed to go back into the 6,600-point level after dipping below the 6,400-point mark.
Today, the local bourse will welcome another company where market participants could consider putting their investments into, with the official listing of international canned beverage and fruits maker Del Monte Pacific Ltd.