PH stocks seen to rise this weekBy Paolo G. Montecillo |Philippine Daily Inquirer
Local share prices may test record highs again this week despite the lack of any scheduled economic news to drive momentum from local investors.
Fund managers are instead expected to take their cue from news abroad, bolstered by the general optimism over the domestic economy.
The main Philippine Stock Exchange index (PSEi) ended the week at 6,167, up 0.46 percent week on week and just 4 points short of its highest close of 6,171.70.
Brokerage firm AB Capital said news from the United States, particularly on rosy corporate earnings and favorable legislation on the debt ceiling overshadowed the downbeat tone of the International Monetary Fund (IMF).
The IMF reduced its global growth forecast to 3.5 percent from 3.6 percent. It also expected the European region to contract due to the looming debt crisis.
“US corporate earnings, which came in better than expected, provided a breather to the IMF’s outlook,” AB Capital said. “At home, local investors also kept in mind the recent meeting of the BSP.”
The central bank maintained overnight borrowing and lending rates at 3.5 percent and 5.5 percent, respectively. Special deposit account (SDA) rates, however, were trimmed to 3 percent from 3.65 percent across all maturities.
“While there are no scheduled local economic data to be released [this] week, investors will hinge trades on overseas developments. On the technical side, we see the index testing 6,200,” the firm said.
“Breaking this level would be challenging given the divergence of momentum indicators. Support and resistance levels are at 6,100 and 6,200, respectively,” it added.
In a separate report, analysts from Accord Capital said the expected strong performance of the Philippine economy continued to fuel optimism among local investors.
“If the 2012 performance alone is the backdrop, the outlook for 2013 proves compelling to take on risks,” Accord Capital said, adding that the year-to-date GDP growth at the end of the third quarter already exceeded the government’s full-year target.
“This despite below-programmed spending marked by a slow rollout of the centerpiece PPP scheme and weak exports,” it added.