Volatile trading seen
MANILA, Philippines—The stock market is bracing for another week of volatility due to the economic woes in the United States and Europe, but selective bargain-hunting is seen aiding the main-share index.
Last week, the Philippine Stock Exchange index shed 2.6 percent to finish at 4,321.73 on Friday.
“I think that there will be follow-through buying for those issues that were badly beaten down last week,” said Manuel Lisbona, deputy chief of PNB Securities.
“Funds will continue to flow into gold miners Philex, Lepanto-B, Manila Mining-B. Technical corrections should be treated as buying opportunities,” Lisbona said.
Gold prices have skyrocketed as investors turn to precious metals as a safe haven after the US lost its triple-A credit rating.
Accord Capital Equities Corp. dealer Justino Calaycay Jr. said that after recovering huge losses, investors were expected to be on the hunt for bargain counters this week, “focusing more on the fundamental resilience of the broad economy as well as positive corporate numbers through the first semester.”
Calaycay said last week’s closing still provided the local market enough room above the 4,270-4,290 support range, which he said could hold moving forward.
“The technical condition of the market has moved over to the side of the fundamentals, presenting investors with an opportunity to rebuild their equity portfolio for the medium to long term,” Calaycay said.
Calaycay said uncertainties remained a cloud overhead and sudden drops might still occur as the head winds gain strength.
“But with most, if not all, emanating from external influences, contemporary and even not so recent market history provide fertile ground for optimism,” Calaycay said.
“With risks continuing to be elevated, we are more inclined to beef up our equity portfolio with stocks of good companies undergoing bad times. Principal candidates are index-related counters,” Calaycay added.—Doris Dumlao
