With no specific leads to set the trend in local stocks this week, investors may opt to consolidate amid the prolonged effect of Super Typhoon Yolanda and year-end groundwork.
Freya Natividad, analyst at Papa Securities Inc., said that the market may consolidate next week as investors still search for proper leads to keep them in the market toward the end of the year.
“For next week, the main direction is still consolidation. Consolidation might continue next week because others are still getting a closer look on the effects of Yolanda,” she said.
“I think [investors are still searching for]more encouraging news because effects of Yolanda is negative for Q4 [fourth quarter of the year]. Others are looking for good prospects for 2014, what could be the booster for next year after the damage from Yolanda,” she further said.
According to her, what could possibly cheer the market right now are the rush for Yuletide season, which usually drives the consumer spending, and the reconstruction efforts for Yolanda-stricken areas.
Meanwhile, Richard Liboro, director of BPI Securities, said that he remains bullish about the market given the country’s third-quarter gross domestic product growth of 7 percent that pushed the market index up to the 6,200-point level.
“It’s pretty much a month-end, probably some window dressing. Buying on momentum on certain stocks that were oversold,” Liboro added.
Overseas, online brokerage 2TradeAsia specified there has been a “gradual” improvement in some of the major markets in the world.
“Improving economic gauges in the US and Europe will support prospects for higher Asian exports. At this juncture, markets are more able to price-in ‘gradual pace’ of recovery from these economies, bearing in mind China’s solid impact in the region, being the anchor economy,” the brokerage said in its weekly outlook.
“Reduced political tensions should also keep perceived risk premiums tame, and boost demand for equities placement,” it added.
Last week, the market ended at the 6,200-point level with Philippine Stock Exchange index (PSEi) still enjoying the third-quarter economic growth results.
The PSEi made a 0.63-percent increase, or 38.86 points to end the Friday session at 6,208.82.