MOST local stocks are seen to firm up slightly this week on the back of a benign local inflation report and prospective progress on Greek debt discussions.
Last week, the main-share Philippine Stock Exchange index (PSEi) shed 53.76 points or 0.7 percent from last Friday’s finish of 7,580.46. The support level at 7,500 is seen critical to watch this week.
In its weekly research note, local stockbrokerage AB Capital Securities said the PSEi failed to sustain its recovery on concerns that Greece may default in its payments.
On the other hand, the government reported last week that year-on-year inflation fell to a 20-year low in May at 1.6 percent compared to 2.2 percent in April as food prices normalized. This was lower than the market’s consensus forecast of 2 percent while hitting the lower end of the Bangko Sentral ng Pilipinas’ official forecast range of 1.6 to 2.4 percent.
This week, AB Capital said the outlook could be slightly bullish as the Greek debt crisis might be resolved alongside the lower-than-expected May inflation rate, which was generally considered bullish for equities.
“However, given that the mid-term outlook remains bearish, investors may want to use index rebounds as an opportunity to lessen equity exposure in their portfolio,” AB Capital Securities said. Doris Dumlao-Abadilla