Local stocks are expected to scale new heights this week as investors weigh in the impact of the investment grade rating issued by Fitch shortly before the long Lenten break.
Last week, the main-share Philippine Stock Exchange index gained by 328.76 points, or 5 percent, to close at 6,847.47 on Wednesday. The market was closed on Thursday and Friday in observance of the Holy Week.
Jose Vistan of AB Capital Securities, said the main index would attempt to breach 7,000 this week.
“Trading will be upbeat as the Fitch upgrade was announced [before the long holiday break],” Vistan said.
On Wednesday, Fitch announced the upgrade of the Philippines’ Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘BBB-’ from ‘BB+’ with a stable outlook, lifting the Philippine debt grade out of “junk” status for the first time in history.
This immediately triggered a new wave of buying at the stock market during the last hour of trade.
“Chartwise the week’s close at 6,847.47 implies further tests toward the 6,900-7,000 levels,” said Jonathan Ravelas of Banco de Oro Unibank. But failure to test those levels could prompt some profit-taking toward the 6,575 to 6,600 levels, he added.
Year-to-date, the PSEi has rallied by 17.8 percent, or 1,034.74 points. The main index has also logged a total of 24 record closing highs since the start of the year.
“We are now officially an investment-grade country … and this is an achievement that we all should be proud of,” PSE president Hans Sicat said. “Hopefully, the other rating agencies will follow suit so we can start seeing more investors participate in the growth of our listed companies and the economy.”—Doris C. Dumlao