The local stocks index is seen testing the 7,000 level this week as some investors take position at the dawning of the first-quarter local corporate earnings reporting season.
Expectations of a second investment grade in sovereign credit rating and prospective cuts in special deposit account (SDA) rates during the upcoming monetary setting of the Bangko Sentral ng Pilipinas this Thursday (April 25) are also seen boosting risk-taking this week.
Last Friday, the Philippine Stock Exchange index rallied to a new high of 6,957.10, the best finish ever seen by the local market and likewise the intra-day high. For the week, the index firmed up by 65.67 points or 0.95 percent.
“I think the index can test 7,000 this week,” said Manny Cruz, chief strategist at Asiasec Equities.
Cruz said the index was recently being driven by expectations that as early as May, a second credit-rating firm—possibly Standard & Poor’s—would follow Fitch Ratings’ investment grade rating on the Philippine sovereign. “If that happens, there will be a lot of inflows from Japanese funds that are not allowed to invest in non-investment grade countries,” Cruz said. Doris C. Dumlao