PH stocks seen to continue record climb
MANILA, Philippines–Most local stocks are expected to explore new heights, but the gains may be capped by an increase in profit-taking.
Last week, the main-share Philippine Stock Exchange index racked up 132.76 points, or 1.69 percent, to close on Friday at its best-ever finish of 7,861.33.
“Chartwise, continue to see tests toward the 8,000 levels,” said Banco de Oro Unibank chief strategist Jonathan Ravelas.
He said stocks would continue its record-breaking climb, driven by favorable fourth-quarter and full-year 2014 earnings results, thus providing an encouraging outlook for 2015.
Other dealers said strong liquidity would propel the market, with more foreign funds likely to buy into prospects that the Philippines would benefit from the global downturn in oil prices.
But with the market’s strong showing, some investors are turning cautious.
“Selling pressure continues to build up despite the advances, so we retain our weekly sideways to downtrend outlook,” said Luis Gerard Limlingan, managing director of stock brokerage Regina Capital Development Corp.
“Divergences will be an ongoing threat for the index as upward momentum is lost,” Limlingan said.
For this week, Regina Capital recommends that investors hold on to their stocks for as long as the 32-day moving average is intact.
Last week, the peso weakened to 44.125 against the US dollar on news that the European Central Bank would start its monetary stimulus this week. This caused the euro to depreciate against the greenback.
Week-on-week, however, the peso was unchanged at 44.090:$1.
“Expect the local currency to trade between 44-44.30 levels in the week ahead. A close above 44.30 will signal tests towards 44.50-44.70,” Ravelas said.–Doris C. Dumlao
