Cautious trading to persist

MANILA, Philippines—Local stocks are seen to continue trading with caution this week given lingering US and European woes but the revamp of the main-share index effective Monday is also seen to influence trades.

Largely due to external uncertainties, the main-share Philippine Stock Exchange index fell 1 percent last week to close at 4,346.07 on Friday.

Effective Monday, five new companies will join the PSEi—San Miguel Corp., SM Development, Semirara Mining, Cebu Air and Belle Corp. They will replace First Holdings, Filinvest Land, Lepanto, Security Bank and ABS-CBN.

AB Capital Securities analyst Prince Anthony Yeung noted that since mid-August, the PSEi has been trading within a narrow 100-point trading range.

“The range of 4,300 to 4,400 has held mostly due to the uncertainty surrounding the problems of the US and the euro zone,” Yeung said, noting that the range would not likely be broken this week.

“The debt crisis in the euro zone will persist while the US is still in the midst of looking for a solution to help their economy,” Yeung said.

The local market is opening with a bleak backdrop from Wall Street. On Friday, the Dow Jones industrial index slumped 303.68 points, or 2.7 percent, to end at 10,992.13. This was due to reports that a top European Central Bank official, Juergen Stark, resigned ahead of the end of his term in 2014, in the process highlighting deep debates on how to address the euro zone’s problems.

Wall Street also doubted whether the $447-billion jobs program presented by President Obama could get the nod of Congress.

At the local market, Yeung said the five new stocks joining the PSEi would likely be actively traded this week.—Doris C. Dumlao